Ifi'tfHjjMfffl

tiltdw I /K | (titUmii\

CARIBBEAN INTERESTS
OF THE UNITED STATES

M E X I C

'*\V C A*,A

d /*\ \~l<Ji»J ■ GULF OF

£SSl r\ ''Yv__jT ChoRd^kaS HONDl/R.

"-•^f-.'-'

THE

CARIBBEAN

REGION

rJ

/

"c

o

c

/■:

A

N

1.WS $

~;pPg£

CARIBBEAN INTERESTS
OF THE UNITED STATES

BY

CHESTER LLOYD JONES

PBOFE8SOB OP POLITICAL SCIENCE
UNIVEBSITY OF WISCONSIN

D. APPLETON AND COMPANY

NEW YORK LONDON

1916

Copyright, 1916, by
D. APPLETON AND COMPANY

%<\\%6

Printed in the United States of America

TO

ELLEN C. LLOYD JONES

AND

JANE LLOYD JONES

PREFACE

The domestic political problems of the United States and
the development of natural resources have so occupied the
attention of its people that the importance of foreign rela-
tions has not been appreciated. Even at the present time,
though the Republic is no longer in a position of "splendid
isolation" either politically or economically, the average
American citizen does not realize the importance of his coun-
try's relations with other nations, especially with its Ameri-
can neighbors.

One of the most striking illustrations of this failure is the
slight attention given in normal times to the political and
economic bonds with the republics and colonies of the Caribbean
region. The twentieth century is bringing there a steady in-
crease of American influence, both political and economic, a
development more keenly realized in the Caribbean than in the
United States. The European colonies, with but few excep-
tions, feel that their own position in relation to other countries
must be largely influenced by the effect which any measures
proposed will have upon their relations with the United States.
The independent republics, not without misgivings it is true,
are finding that their interests are becoming identified with
those of their powerful northern neighbor.

But the citizens of the United States, on the other hand, do
not recognize the importance of the Caribbean for their coun-
try. They are unaware that counting its colonies and protec-
torates together their country has under its supervision in the
Caribbean a population greater than that of the thirteen col-
onies at the time of the Declaration of Independence. Just as
little is it realized that during the last five years the United
States has been in active negotiation for the creation of pro-

viii PREFACE

tectorates over other territories with a population almost as
great.

Nor is the dominance of the United States in Caribbean trade
any better known. We are, with a few exceptions, the best
customer of these communities. In the greater number we hold
the most important position in their import trade. Steamship
connections with North America are unequaled by those of
any other region, and in the Caribbean ships sailing under the
American flag occupy a place in foreign trade more important
than on any other seas. This primacy of the United States in
Caribbean trade is not one in a commerce which is of small or
stationary amount. This region is one of the chief sources of
American raw-material imports, and the rapidity of the
growth of its commerce exceeds that of the trade with any
of the great continental divisions.

The object of this book is to present in popular form a
brief outline of the more important political and economic de-
velopments in these countries which have a bearing upon the
foreign policy and commerce of the United States. Obviously,
a volume covering so wide a field cannot be an exhaustive dis-
cussion. The most that can be done is to present the salient
outlines of the developments traced.

The substance of two of the chapters on the "International
Importance of the Banana Trade" and "Oil on the Caribbean"
has appeared as articles in the North American Review. The
editors have kindly consented to their republication here.

Chester Lloyd Jones.

University of ^Wisconsin.

v_

CONTENTS

CHAPTER PAGE

I. The International Importance of the Carib-
bean ........ 1

II. Growing Interest of the United States in the

Caribbean 17

III. Relations of the United States with the Brit-
ish West Indies. The Larger Islands . 33
IV. Relations of the United States with the Brit-
ish West Indies. The Smaller Islands and
Mainland Colonies ..... 47
V. The Minor Colonies of the Caribbean . . 68
VI. Cuba and Its Relations to the United States . 80
VII. The Regeneration of Porto Rico ... 98

VIII. Our Responsibilities in the Dominican Repub-
lic 106

IX. The Haitian Protectorate . . . .125

X. The Relations of the United States with Cen-
tral America . . . . . .148

XI. The Panama Revolution and Panama Tolls . 193
XII. The Fortification of the Panama Canal . .217
XIII. Our Relations with the Northern Republics

of South America ..... 229

XIV. The Economic Dependence of the Caribbean 252

XV. Caribbean Products ...... 260

XVI. The International Importance of the Banana

Trade 276

XVII. Oil on the Caribbean ..... 282

XVIII. Big Business and the Caribbean . . . 295

XIX. Harbors and Naval Bases ..... 307

CONTENTS

CHAPTER PAGE

XX. Concessions and the Monroe Doctrine . . 323

XXI. International Leadership in the Caribbean . 336
A Select List of Recent Discussions Relating

to the Caribbean ..... 353

Index ......... 369

CARIBBEAN INTERESTS
OF THE UNITED STATES

CHAPTER I

THE INTERNATIONAL IMPORTANCE OF THE
CARIBBEAN

The rapid growth of the international trade of the
world in the last generation has emphasized the impor-
tance of the economic factor in diplomacy. In 1890,
foreign exchanges are estimated to have reached a total
of $17,519,000,000; in 1900, the total was $20,105,-
000,000 but the next decade and a half brought its most
rapid increase, the total now exceeding $40,000,000,000/
All great commercial countries have been reaching out
for wider politics1 control of territory into which their
commerce may expand and for wider control of the
commerce of all lands under whatever flags. With the
growth of surplus capital, too, foreign investments have
been sought on an unprecedented scale, with the result
that the interests of the peoples of all countries have
become intimately interlaced.

The imperialistic development of our own day, some-
times preceding, sometimes following national economic
interests, has brought a gradual crowding out of weaker
peoples, and an integration of political and commercial

1 In 1913 the total was $40,420,000,000. Statistical Abstract of
the United States, 191^, Washington, 1915, p. 685.

1

2 CARIBBEAN INTERESTS

control under a few great empires. Since the middle
eighties, Africa has been partitioned in such a manner
that today there remain outside the control of the great
European powers but two small and tottering states,
Liberia on the west coast and Abyssinia in the north-
east. Asia, too, especially in the last two decades, has
been subjected to pressure by governments seeking to
mark out for themselves fields for future commercial
expansion. The partition of China, which seemed about
to occur in the late nineties to parallel that of Africa
a decade before, was given a temporary check by the
diplomacy of Secretary Hay, who inaugurated what
was called the "Open-Door Policy" in 1901. Recent
developments have brought renewed attacks upon her
territorial integrity, by Japan on the northeast; by
England on the southwest in Tibet, and by Russia
on the north in Inner and Outer Mongolia and Tur-
kestan.

If South America, Central America, and the Carib-
bean had been geographically isolated, it is at least
doubtful whether conditions would not there have been
developed which would have changed the map in start-
ling ways. But political developments in the New
World have brought the American states into a position
in which de facto the interests of none are isolated. In
the past this has been due not to cooperation, but to the
declared national policy of the most powerful of Ameri-
can nations. The Monroe Doctrine, championed at
various times under various forms by the United States,
has served as a barrier to the propaganda by which
European political control could be further extended

IMPORTANCE OF THE CARIBBEAN 3

in the New World. This doctrine, in its announcement
and through most of its history only political, we are
beginning to realize has a decided economic phase. This
is true not because the United States has used it to its
own advantage and to the disadvantage of Europe, but
because, political control of the American countries by
European powers being cut off, any struggle for
economic advantage in regions not already under
European flags has had to be carried on under sub-
stantially equal terms for all powers. No European
nation has been allowed to mark out a sphere of polit-
ical influence in the New World in which tariff barriers
could be erected to shut out the competition of its
rivals.

By the closing years of the nineteenth century a new
element was beginning to make this principle an even
better established feature of American policy. A group
of South American states had developed stability of
government and national strength to a degree which
differentiated them from the other independent states
of the continent. Though there has been no formal an-
nouncement by these South American states, there is
no longer any doubt that they would feel that any at-
tempt to extend European control over additional ter-
ritory in America would be opposed to their interests,
and it is entirely probable that at least certain among
them might aid in resisting such aggression by force
of arms. Entirely aside from any joint formal diplo-
matic announcement by American states, it is almost
beyond doubt that the principle of the Monroe Doc-
trine, if questioned, would now find zealous support not

4 CARIBBEAN INTERESTS

only in the United States, but in the more stable gov-
ernments of the southern continent.

The states of the extreme south, Argentina, Uruguay
and Chile, are now little likely to be drawn into positions
which will involve danger of successful European at-
tack upon their territories. With them Brazil ought
also to be classed, though there is reason to believe that
at least a part of the rich and unexploited resources of
that great state might before now have passed into the
control of other hands but for the opposition which such
action would have met on the part of the other Ameri-
can powers. The entry of this group of states into the
ranks of those whose foreign policy will be influenced
by continental, and not merely by national, considera-
tions points to the expansion of the Monroe Doctrine
from a principle which is supported by the United
States to one supported by the chief powers of the New
World.

European control of commerce may develop now as
In the past, but the political character of loans in these
countries will become less prominent. Money from
abroad invested in the development of their national
resources will come to have a position more nearly akin
to that which foreign investments have in the United
States, or any other of the world's stable nations. In
those countries where stable governments have been es-
tablished the occasions for interference for the protec-
tion of the investments of nationals have probably come
to an end; at the same time, these powers have now
to be considered in the maintenance of the political pol-
icy of America for Americans. The possibility that the

IMPORTANCE OF THE CARIBBEAN 5

pressure of foreign economic interests may destroy
their governments is remote.

The northern part of South America, the island re-
publics of the Caribbean and the weak states of Central
America are still in a less favorable position. However
much they may sympathize with the policy of resisting
extension of European control, not one independently
could offer effective resistance. Had they been left
unaided to defend themselves by their own diplomacy
and military strength, it is not improbable that before
our day they would have passed under European con-
trol. If they were at the present time left to their own
resources it is unlikely that they would long be able
to maintain their independence.

If we go no farther back than the closing years of the
nineteenth centuiy we find a number of incidents which
contain the elements that might have brought about the
annihilation of some of these states. The Venezuelan
boundary controversy with Great Britain, which came
to a climax in 1896, but for the interference of the Unit-
ed States, would almost certainly have resulted in se-
rious dismemberment of that republic. Five years later
Venezuela was again in complications which pointed to
the possibility of a control of customs houses by a num-
ber of the European powers. Such a temporary occu-
pation of territory might develop a situation in which
the relinquishment of control would be postponed for
long periods, as China has learned to her sorrow in
similar situations. Again in 1905, another weak state,
the Dominican Republic, faced the possibility of a sim-
ilar national disintegration. The reported demand by

6 CARIBBEAN INTERESTS

England and France in 1914 for the control of the Hai-
tian customs is a recent incident which indicates rather
clearly that the danger of impairment of the funda-
mental feature of the American foreign policy with
reference to the weaker states of Latin America has by
no means passed.

In sharp contrast to the conditions found in Africa
and Asia, then, America has been kept free from the
extension of political control by the powerful extra-
continental powers. The struggles of the commercial
diplomacy of European powers in the New World have
not been accompanied by extension of territorial pos-
sessions. They have been confined to competition for
economic advantage in countries under American flags.
The only shifting of political control which has oc-
curred in our day has resulted in the displacement of
a European power from American territory already
held, in the creation of new independent states, or in the
shifting of control of American territory among Ameri-
can states.

TRADE COMPETITION AND INTERNATIONAL INTERESTS

But this condition does not indicate that foreign chan-
celleries allow American affairs to play an unimportant
part in their activities. Political possession of a coun-
try without control of its internal economic development
and of its foreign commerce may be an illusory ad-
vantage, and preponderance in these particulars may
not be inconsistent with the nominal political inde-
pendence of a region. Realizing this fact, commercial

IMPORTANCE OF THE CARIBBEAN 7

and financial interests of the great European nations
have engaged in a contest for the control of American
development and trade, and foreign courts have not been
slow in backing up the interests of their nationals. In
this contest for commercial advantage the American
states have also entered.

Indeed, with the increasing appropriation of exploi-
tation areas elsewhere by the great world powers and
the tendency to create tariff barriers for the advantage
of the home country, the competition for the American
market has become keen and will become keener.
Strong governments in the New World will reap decided
advantages from this development. It will bring them
into touch with world markets; it will stimulate their
peoples to greater production and a higher standard of
life. Foreign capital will seek their borders to the ad-
vantage of both the investor and the resident popula-
tion.

But, under the same influences, the weaker govern-
ments may find the functions which they are called upon
to assume more onerous and insistent than ever before,
and perhaps beyond their power of performance. From
Texas to Brazil and Chile extends a group of states and
colonies some of which are in all but perpetual disorder.
Some of these lack capital for the development of their
natural resources, and good transportation facilities to
bring them into touch with the world markets. Some
will be valuable chiefly because of the favorable loca-
tion as bases from which trade may be controlled. Oth-
ers languish because of an inefficient labor supply, and
still others, through lack of natural wealth, seem des-

8 CARIBBEAN INTERESTS

tined never to occupy an important or prosperous posi-
tion.

In all of these communities the commercial diplomacy
of our time will have a growing interest, an interest
greatly enhanced by the fact that through the Caribbean,
the traffic center of the American tropics, will pass the
trade routes developed by the Panama Canal. Both
the competition for the control of the trade which lies
within their borders, and the fact that before their ports
passes the commerce of distant countries will give to
Caribbean communities an importance in international
affairs they have not had since the days when the Span-
ish empire in America was at its height and the people
of one of the great world powers depended for its pros-
perity on the arrival of the gold ships from its Ameri-
can colonies. The fortunes of the Caribbean are no
matter of merely local interest. They involve, to a de-
gree still unappreciated, the world at large and espe-
cially the American continents, both North and South.
Upon the solution of the problems which arise there may
depend the character of international political and
economic development in America. The importance of
the new position in which the Caribbean region stands
is brought home by almost every general phase of
American international affairs.

Caribbean problems, even if the countries lying in
the region did not themselves have possibilities of eco-
nomic importance, would be of great and increasing
significance, especially for the maritime nations. The
Balkans and Asia Minor have an importance far be-
yond their intrinsic wealth because they lie on the trade

IMPORTANCE OF THE CARIBBEAN 9

routes between the East and West. In a similar way,
the Caribbean in the New World furnishes a path for the
commerce of the Orient and the Occident. In addition,
through it will go all of the commerce from Europe to
the northern tier of South American states and part, at
least, of that from Europe to the west coasts of both
Americas. The cutting of the Isthmus, too, will make
these waters of increased importance in the trade be-
tween the eastern and western portions of the American
continents. No other region will have its position in
the transit trade of the world more radically changed
in our generation.

But the fact that the Caribbean will be the crossroads
of the western world does not measure its importance.
The Panama Canal is, of course, the commanding fea-
ture in the minds of all who think of this part of the
world. The interests which are bound up in that wa-
terway affect all others, but there are other phases of
Caribbean development which deserve attention not only
on account of this secondary relation to the canal, but
because of their own intrinsic importance.

Little appreciated among these factors which are lo-
cally important is the volume of international trade orig-
inating in and finding its destination in Caribbean re-
gions. Compared to the great foreign commerce of
Germany or the United Kingdom, the trade of the
Caribbean region is small. It contributes to none of
the great commercial nations a share of its commerce
which reflects the number of its peoples or the extent
of its territories. In spite of the fact that its exports
are almost exclusively of raw materials, or, at best, only

10

CARIBBEAN INTERESTS

partly manufactured products, and in spite of the fact
that its imports are the materials first sought in unde-
veloped countries or those necessities demanded by a
population of a low standard of life, still the commer-
cial importance of these countries is increasing both rela-
tively and absolutely. The new developments do not
affect the world market except in a few articles, but a
comparison of international exchange as it now exists
with conditions a decade ago, given in the following
table, shows an increase decidedly encouraging and full
of significance.

RECENT GROWTH OF INTERNATIONAL TRADE IN THE CHIEF COUNTRIES OF
THE CARIBBEAN REGION

Compiled from Statistical Abstract of the United Stales, 190 i, Department of Commerce and Labor,
Washington, 1905, and Statistical Abstract of the United States, 191 4, Department of Commerce,

Washington, 1915

Country

Year

Imports

Exports

Year

Imports

Exports

Percentage of

Increase in
Total Foreign
Trade During
Period Named

1904
1904
1904
1903
1903

$5,463,000
4,906,000
2,161,000
2,461,000
3,088,000

$6,716,000
7,350,000
2,177,000
3,125,000
5,670,000

1913
1913
1913
1913
1912
1912
1913
1914
1913
1913
1914

$8,685,000

10,062,000
5,133,000
5,768,000
6,167,000
9,872,000

26,987,000
133,975,000

10,935,000
9,272,000

17,005,000

$10,322,000

14,450,000

3,300,000

7,712,000

7,666,000

2,065,000!

34,316,000

170,776,000

17,273,000

10,470,000

26,324,000

56

Guatemala

100
94

Nicaragua

141

57

Colombia

Haiti

The Dominican Republic

1903
1904
1901
1901
1903

14,453,000
77,028,000
5,500,000
2,987,000
5,425,000

12,658,000

89,013,000

12,760,000

5,224,000

7,653,000

126

83

54

140

231

Totals

$123,472,000

$152,346,000

$243,861,000

$304,674,000

982

1 Included in Colombia in 1903.

2 The dates are not uniform for all the countries cited

Every republic in the list is rapidly increasing its
trade. In the more important units the foreign com-
merce has been growing on the average at the rate of
over one hundred per cent, a decade. Such a develop-
ment merits the attention of all interested in the ex-
pansion of the world's foreign exchanges.

IMPORTANCE OF THE CARIBBEAN 11

INVESTMENTS AND INTERNATIONAL INTERESTS

Partly acting as a cause of this trade development,
partly one of its results, there is going on a steady and
rapid influx of foreign capital. The English financing
of the Argentine is familiar to students of Latin- Amer-
ican history. In recent years, with the establishment
of order in Mexico, that country has attracted large
amounts of foreign investments. The same develop-
ment has come in the Caribbean. It is, of course, most
marked in those countries where natural resources
awaiting development are found in the control of gov-
ernments which by their stability give promise of pro-
tection to life and property. The degree to which in-
vestment has occurred it is impossible to determine even
for the nationals of single foreign countries. The de-
parture of Spain from Cuba and Porto Rico was the
signal for a rush of investors to those islands to develop
resources which mistaken fiscal policies and local unrest
had formerly kept unused. To a lesser degree, the same
development is going on in other units. Foreign cap-
ital exploits the sugar, tobacco, coffee, cocoa, fruit, oil
and asphalt. In fact, almost every product of the re-
gion which enters largely into world trade feels its
influence. These investments are scattered among all
the great commercial nations. They give an interna-
tional character even to purely internal improvements.
Economic interests now tend to overflow national
boundaries and to make the orderly development of
every state truly a matter of general concern.

Governments come to look upon revolutions which

12 CARIBBEAN INTERESTS

destroy the property of their citizens as matters in
which, as states, they are involved. They feel disposed
to extend their good offices to protect their subjects'
property abroad just as they try to forward their citi-
zens' international trade interests; in fact, the two are
only different phases of the same thing.

Unstable governments are unwelcome to a diplomacy
which has as one of its controlling motives the creation
of an extensive international exchange. Weakness of
government may lead in the future, as it has in the past,
to the raising of acute international questions. In re-
cent years, we have had too many examples of the com-
plications which may arise out of such conditions. Un-
fortunately the history of the Caribbean republics does
not indicate that there is any likelihood that such inci-
dents have come to an end.

HEALTH PROBLEMS AND INTERNATIONAL INTERESTS

A generation ago the connection which health prob-
lems had with international affairs was comparatively
unimportant. Not so today. We could be satisfied
with less stringent quarantine regulations in the days of
slow sailing ships and infrequent communication with
the tropics. Then, if contagion did develop aboard it
might even run its course before the vessel approached
our ports. But the growth of commercial relations and
greater speed in transportation have necessitated in-
creased precautions against the introduction of disease
from foreign countries. Disease in the American trop-
ics is now only days, where it was formerly weeks, away

IMPORTANCE OF THE CARIBBEAN 13

from the countries enjoying temperate climates. The
remarkable improvement of sanitary conditions in Cuba,
Porto Rico and the Canal Zone is an example of what
must occur in all tropical communities, the products of
which enter largely into foreign trade. If such im-
provement is not made general the offending countries
will find their commerce hampered by vexatious and
costly quarantines instituted by the great commercial
nations. The boycott proposed against certain west
coast South American ports in case modern methods
of sanitation were not introduced illustrated the transi-
tion of health problems of only local concern to matters
of international interest.

It is impossible, moreover, when communities lie close
together or when, as in Central America, there are no
natural boundaries between states, effectively to isolate
the health problems of one section from those of the
neighboring sections. Even when the open sea sepa-
rates the communities the difficulties do not disappear.
Small boats, such as pass between Haiti, Cuba and Ja-
maica, for example, may make quarantine as well as
customs laws difficult to enforce, and the damage they
may thus cause by the introduction of disease may be
much greater than that arising from fraud upon the
public revenue. The health problem, of necessity, must
be treated as regional, and therefore international.

PUBLIC ORDER AND INTERNATIONAL INTERESTS

Underlying the effective development of international
trade, the promotion of foreign investments, and the

14 CARIBBEAN INTERESTS

proper protection of the general public health, lies, of
course, the fundamental problem of public order. The
American tropics have been said to suffer from the
three d's: disorder, disease, and distrust. The most
fundamental affliction is disorder. Given governments
able to protect life and property, and trade conditions
are least likely to develop international disputes and for-
eign investments lose their political character, and local
advantage will dictate the maintenance of sanitary con-
ditions. So long as economic relations with any country
are negligible, international interest in its fortunes is
chiefly sentimental. If its people suffer from droughts
and hurricanes their condition arouses our sympathy.
If revolutions come which involve unspeakable brutal-
ities in the contests of rival factions we are horrified, but
it is normally "no affair of ours."

If, on the other hand, foreigners depend upon a cer-
tain country for an important part of their food supply ;
if they count on marketing there millions of dollars'
worth of their manufactures ; if they hold a considerable
portion of a certain country's national wealth; if the
health of each country is endangered by bad conditions
in all others; then the maintenance of order becomes a
matter of genuine international concern. This may not
be the highest ethical standard, but it is the accepted
economic standard which year in and year out, to an
important degree, determines international action.

Order was formerly, even in Anglo-Saxon countries,
a local question. It later became a national concern.
It is now rapidly becoming a thing demanded by inter-
ests international in character. Even though interna-

IMPORTANCE OF THE CARIBBEAN 15

tional law gives no rules by which order in a country
may be assured, international interest in the mainte-
nance of order is increasing and will continue to increase.

For no other nation is order in the Caribbean coun-
tries so important as for the United States, both for
the reason that these political neighbors are our next
neighbors and because no foreign nation has interests in
this group in trade, in investments, in the protection of
health, or of a general political nature, comparable to
ours. The economic and political forces which are
working in the countries immediately south of us are not
without their bearing therefore upon foreign policy, es-
pecially our foreign policy. Our relations with these
communities are bound to become more and more inti-
mate. The political ownership of the territories, the
fiscal policies adopted by their governments, the extent
and direction of their foreign trade, the problems aris-
ing from the peculiarities of their populations, their
financial status, the exploitation of their natural re-
sources, these and other problems will concern us far
more than any other great power of the world.

In spite of this fact the American people know but
little of developments in the Caribbean. To most
Americans the word is little more than a vague geo-
graphical expression. Few realize either the present
importance of the region in world trade and its greater
importance in international politics, or the significance
it will come to have when in the twentieth century it
again becomes what it was in the sixteenth, one of the
great highways of the world's commerce. The im-
portance of territory is to be measured by its products

16 CARIBBEAN INTERESTS

and by its position. In both ways, the Caribbean de-
serves our attention. That the tropics are to be mas-
tered by modern civilization is evidently the belief of all
European powers. They have lavished attention upon
Asia and upon the less promising Africa. If the coun-
tries of the New World are to share in making the world
serve the world's needs, the development of the Ameri-
can tropics is naturally their task. In a peculiar way
this responsibility rests upon the United States and the
responsibility carries with it great opportunities.

Trade routes have always played an important part
in the developments of international politics. The
course of trade around the Cape of Good Hope raised
Portugal for a brief period to the rank of a world
power; England's commerce to the Ear East is built
upon the control of the Suez Canal ; one of the elements
back of the great European War was the desire for con-
trol of another route to the Orient, and the position of
the United States, politically and commercially, among
the nations of the world will largely be influenced by
the way we handle the responsibilities and opportuni-
ties which center in the waters of the Caribbean.

CHAPTER II

GROWING INTEREST OF THE UNITED STATES IN
THE CARIBBEAN

I. POLITICAL

Few citizens of the United States realize the grow-
ing influence of their country in international affairs.
Since the close of the nineteenth century we have aban-
doned the position of disinterested spectator of affairs
in Africa and Asia and, though we have not adopted
in the eastern hemisphere the stronghanded diplomacy
which has characterized the great European nations, the
opinion of the United States has been asked for and
given in political affairs in these continents in which we
should formerly have considered ourselves unconcerned.
In America, we have taken a much more active part and
the preponderance of the United States in the politics of
the western hemisphere has been accentuated from year
to year.

That this realization of the larger role which we might
play in international politics comes to us late as a na-
tion has often been pointed out. The explanation is
simple; it lies not in any ineptitude of our people for
participation in world affairs, but in the fact that our
domestic problems were so absorbing that the foreign
interests we might have had were pushed into the back-
ground. Land was offered to the enterprising, free or

17

18 CARIBBEAN INTERESTS

at a nominal cost ; our great national resources lay ready
to be exploited ; our home industries demanded men and
capital, and the local market for manufactured goods
was greater than the supply. No consistent interest in
foreign affairs and foreign trade in particular could
be aroused among a people whose economic position
demanded so little reliance upon the exchange of
products with foreign countries. Such political and
economic power as we had in international affairs came
to us by force of circumstances, often accidentally
rather than through any policy of the Government
or vigilant searching for new markets by our mer-
chants.

There were, of course, many who saw ahead to the
time when our foreign trade would become highly im-
portant for us. They realized the relation which a
strong political position may have to the economic life
of a nation, but even when in a commanding position,
these leaders can hardly be said, except in a few in-
stances, to have had an aroused public opinion back of
the policies they advocated. The influence in interna-
tional affairs which we enjoyed came chiefly because of
our inherent strength at home, not because of wide co-
lonial or other political interests.

This condition passed with the end of the nineteenth
century. Free land had disappeared about a decade
before. Industry was rapidly overtaking the home de-
mand ; our growing population, it was seen, would soon
reduce our importance as sellers of foodstuffs in the
world's markets. Our exports were changing from raw
materials to manufactured goods. The time had come

INTEREST OF THE UNITED STATES 19

when foreign trade would play an increasingly impor-
tant part in our national economy.

Since the middle eighties there had been in progress
the world over a scramble for territory, which had re-
sulted in the partition of Africa and threatened to bring
about the division of China among the great powers of
Europe. In this last rush to stake out colonial claims
which might develop into sources of raw materials, mar-
kets for the manufactures of the home country and, to
a lesser degree, areas in which white colonists might set-
tle, the United States had taken no part. Just at the
end of the century, it is true, she came into a conflict
with Spain, the result of which made her a holder of
both Caribbean and Asiatic colonies. This was, how-
ever, a development of no conscious imperialism, and
one but slightly, if at all, connected with the movement
for increased colonial holdings in which the European
powers had been engaged.

But to whatever degree the Spanish- American War
may be held to have been imperialistic or dictated only
by the desire to stop cruel and useless warfare in Cuba,
the influence of the new position in which it placed the
United States is unmistakable. Coming at a time when
our foreign trade was already rapidly increasing, the
possession of Porto Rico and our new responsibilities in
Cuba did not leave us unaware of the economic and
political advantages which we might reap in the Carib-
bean.

The turn of events brought more clearly to the view
of the American people our long historical interest in
the Caribbean and its problems. Formerly, this in-

20 CARIBBEAN INTERESTS

terest was explained by the desire for an outlet for the
trade of our western states by way of the Mississippi
River. Some of our more far-seeing statesmen had de-
clared that just as a fruit when ripe drops to the ground,
so Cuba would in due time gravitate toward the United
States. Our trade with the British West Indies had
been a source of controversy with the mother country
until she changed her colonial policies. The efforts of
the former colonies of Spain to secure their independence
had occupied us periodically through the whole of the
nineteenth century. There were, therefore, many inci-
dents and interests, chiefly political, which had made the
Caribbean region of interest to us.

Now, however, under new conditions, this region was
to occupy a far more prominent position. To the com-
munities of the Caribbean it might be expected our
merchants would turn for a market for our rapidly in-
creasing manufactures. The products of those coun-
tries were certain to seek the United States market, and
though their populations were not of high consuming
capacity, still they furnished a market, which on account
of its proximity was attractive to us.

Political, as well as economic influences, impelled us
to give greater attention to Caribbean affairs. In some
cases, these involved disputes between our neighbors
and their European creditors, or confiscation of the prop-
erty of our citizens or foreigners; in other instances, pol-
icies of world-wide importance were touched, such as the
development of transportation facilities on the Isthmian
route.

Hardly a year now passes which does not see a wid-

INTEREST OF THE UNITED STATES 21

ened influence of the United States in Caribbean trade
or politics. The closing years of the nineteenth cen-
tury gave us our first important West Indian posses-
sions and a new international responsibility in Cuba.
Then followed our assumption of duties under the Piatt
Amendment, by which we practically guarantee order
in the island and have exacted a promise that it will not
incur financial obligations beyond its ability to pay. In
1903, our commercial treaty with Cuba still further
identified her interests with ours.

Meanwhile, our Government had definitely faced the
task of building the Panama Canal, the only question
being the route to be adopted. The Panama revolution
occurred, and the Government was committed to the
Panama route. Again, as in Cuba, the United States
concluded with the new republic a treaty establishing a
virtual protectorate and assuring to the United States
complete control over the Canal Zone. In 1905, Presi-
dent Roosevelt made an unsuccessful attempt to induce
the United States to assume control of the customs col-
lections in the Dominican Republic. The treaty fail-
ing, a protocol was put into force which practically ac-
complished the same result. Two years later, influenced
probably by the successful operation of the protocol, the
Senate approved an instrument of the same general
character as that of 1905. Before the Dominican af-
fair had been settled, we were called upon to act on our
right to interfere to preserve order in Cuba. American
troops were introduced to protect life and property, and
were withdrawn only after the creation of a govern-
ment chosen at a fair election. The Taft administra-

22 CARIBBEAN INTERESTS

tion which succeeded that of Mr. Roosevelt took an
active part in bringing to an end a revolution in Nic-
aragua, and negotiated treaties looking toward the ex-
tension to Nicaragua and Honduras of agreements sim-
ilar to the one in force in the Dominican Republic.

Though our national election of 1912 brought a
change in the party in control of the Government, it
brought no change in the policy of the United States
toward the Caribbean. The American marines, sta-
tioned in Nicaragua after a revolution late in 1912, were
still kept there for the preservation of order, and nego-
tiations for treaties were renewed on a basis alleged to
be even more comprehensive than that of those previ-
ously proposed. Disturbances in the Dominican Re-
public made a fair election there unlikely, and with the
consent of the local government a force of American
officials was sent from Porto Rico to "observe" the poll-
ing, thus to assure that no intimidation should prevent
the expression of the popular preference. In 1915, a
treaty was concluded establishing a fiscal protectorate
over Haiti and early in the following year the Senate
ratified conventions with both Haiti and Nicaragua.

This brief resume of some of our actions in the coun-
tries south of us serves to indicate the gradually expand-
ing circles of the political interests of the United States.
Whether the condition is one acceptable to us or not,
we are no longer merely a continental power. We al-
ready hold an Asiatic colony. A weak African state
founded from this country has asked us for a protec-
torate and is already under our benevolent supervision.
Toward the south we hold a colony, Porto Rico, and are

INTEREST OF THE UNITED STATES 23

the protectors of Cuba, Panama, the Dominican Repub-
lic, and Haiti. We have responsibilities in Nica-
ragua. That the end of this development has come
is highly unlikely. Political parties may differ as to
national policies, internal and external, but they must
bend before the natural course of economic and political
development. Our last three Administrations, those of
Mr. Roosevelt, Mr. Taft, and Mr. Wilson, have repre-
sented widely divergent political views, but the general
policy of all toward Caribbean countries has been funda-
mentally the same. All have been willing to assume
increasing responsibilities toward our weaker neighbors.
It has been a development responding to the logic of
events rather than one directed by long-planned policy
or party politics.

II. ECONOMIC

The tropical states of America do not play a part in
international commerce commensurate with their extent
and resources. Like all regions of like climate they
have developed no important manufacturing interests.
In addition, their advance has been hindered by dis-
turbed political conditions and lack of capital. To no
country is their political regeneration and economic de-
velopment of such great interest as to the United States.
Ours is rapidly becoming a manufacturing country
which will seek a foreign market for the products of its
industry. These non-manufacturing areas will be re-
lied on increasingly as a source of our raw materials and
as a market for our increasing surplus goods. South
America and the Caribbean are already the chief source

24

CARIBBEAN INTERESTS

of our raw material imports. Our dependence on them
will increase.

The Caribbean, because it lies nearer to us than to any
other great manufacturing country, deserves our special
attention. Though the actual trade exchanged does not
compare favorably with that with more developed re-
gions, it is more important for us than its amount indi-
cates, for, first, this is trade with our near neighbors.
Second, it is chiefly a raw-materials trade as to imports
and a manufactured-goods trade as to exports. Third
and most important, its relative growth in recent years
compares favorably with that from any of the great re-
gions. Our export trade to the Caribbean countries in
the years 1902-14 showed a greater percentage of in-
crease than that to any non- American division. Our im-
port trade showed a greater relative increase than any
non-American region, except Oceania. Both our im-
ports thence and our exports sent there are almost three
times what they were twelve years ago.

Inckease of Trade of the United States with Grand Divisions, 1902-14
(Compiled from Statistical Abstract of the United States, 1914, Washington, 1915)

1

Exports,
1902

Exports,
1914

Percentage
Increase

or
Decrease

Imports,
1902

Imports,
1914

Percentage
Increase

Europe

North America. .
South America. .

Asia

Oceania

$1,008,133,981
203,971,080
38,043,617
63,944,077
34,258,041
33,168,605
73,851,462

$1,486,498,729
528,644,962
124,539,909
113,425,616
83,568,417
27,901,515
190,634,343

+32.
+ 159.
+237.

+77.
+144.

—16.
+158.

$475,161,941
151,076,524
119,785,756
129,682,651
14,166,461
13,447,615
88,671,202

$895,602,868
427,399,354
222,677,075
286,952,486
42,144,398
19,149,476
242,716,484

+88.
+ 182.

+85.
+121.
+ 190.

+42.

Caribbean Region

+173.

The growth in absolute amount also is remarkable.
In recent years the increase in exports to the Caribbean

INTEREST OF THE UNITED STATES 25

region has been exceeded only by that to Europe and to
North America.1 Our combined export trade to Asia,
Africa, and Oceania has increased less than that to the
Caribbean. The import figures also show unusual
growth. The increase in this region has been greater
than that from Asia or South America and many times
that from Oceania and Africa. The chief advance has
been in our relations with the independent republics.

With the European colonies in the West Indies, the
development of our trade relations is hampered by a
number of causes. Some of these can be removed by
action on the part of our Government or exporters, some
cannot. Lack of transportation lines hinders exchange
with some of the colonies. The subsidized steamship
line between the British West Indian ports and Canada
drains off some of their trade in that direction. The
preferential tariff in force between the two countries
since 1913 affects our trade adversely. The policy of
France, also, is to shape her tariffs in the West Indies
to shut out the sending of colonial goods to foreign coun-
tries and to insure the home market a monopoly of im-
ports where possible. Banking houses, especially, when
they have Government connections may be used to make
the trade run on national lines. The banks in the French
West Indies, it is reported, charge three per cent, in
addition to the regular rate of exchange on all payments

1 It is to be kept in mind that the comparisons of the Caribbean
region with North America and South America involve overlap-
pings; in this instance, for example, the increase in the trade of
Cuba appears in the figures for both North America and the
Caribbean.

26 CARIBBEAN INTERESTS

made through New York. In some of the colonies
branches of commercial houses in the home country are
established. They buy only from their principals. Fur-
thermore, there is a French reciprocity treaty with Haiti
which operates to their advantage.

Besides these efforts on the part of other Govern-
ments or their nationals to promote their foreign com-
merce, our foreign trade is, of course, affected by our
tariff. To protect our own producers we have kept,
for example, a tariff on sugar. Louisiana, Texas, Ha-
waii, and Porto Rico profited thus where Barbados, for
example, could not. A free sugar policy would doubt-
less turn some Barbadian sugar to New York instead of
to British ports.

It is due to causes such as these that our exchanges
with the West Indies in the trade of which we have
neither natural nor artificial advantages have not shown
rapid advance. The percentages of increase are high
in some instances but in absolute amount we often make
a poor showing in their foreign commerce. We have a
growing trade which makes a good showing against the
total in British Honduras, Jamaica, Trinidad, the
Dutch islands in the West Indies and in the import
trade of Haiti. But in other units, though our trade is
in some cases increasing, it does not keep up with the
rise of the foreign trade. We are either making slow
progress or actually losing in some of the smaller Brit-
ish West Indies, the Danish West Indies, Barbados,
British Guiana and in the export trade of the French
West Indies and Haiti; we are only holding our own
in Dutch Guiana and French Guiana.

INTEREST OF THE UNITED STATES 27

These regions in which we are in a less favorable po-
sition are not the great exploitation areas of the Carib-
bean. They are, with some exceptions, either fully de-
veloped communities like Barbados, where there is little
chance for trade expansion, or districts in which trade
development cannot become great, or, at least, has not
yet become important. In the regions where active
advance is being made, whether on the continents or in
the island areas, the position which the United States
holds in trade is highly encouraging. The necessity for
its protection and promotion, both because of its present
significance and future possibilities, must have an im-
portant influence on our foreign policy.

Increase in the Tbade of the United States in the Caribbean Region

1902-14

(Compiled from Statistical Abstract of the United States, 19H,
Washington, 1915, pp. 327-340)

Country

Exports from
U. S., 1902

Exports from
IL S., 1914

Percentage
Increase

or
Decrease

Imports into
U. S., 1902

Imports into
U. S., 1914

Percentage
Increase

or
Decrease

$1,490,868

773,676

1,405,842

1,680,939

983,595

1,359,386

$1,613,813
1,699,438
3,501,386
3,601,813
4,873,512
2,629,034

22,678,234
2,155,138

13,357,010

68,884,428

890,966

906,540

2,083,623

5,540,706

4,917,201

6,786,153

1,700,360

711,482

295,334

5,401,386

32,568,368

+8.
+119.
+149.
+ 114.
+395.
+93.

+141.

+36.

+158.

+26.

+43.

+23 .

+105.

+211.
+ 128.

—12.

+45.

+40.

+93.
199.

$487,231
234,231
3,220,494
2,993,336
1,080,788
1,978,025

$695,419

2,099,275

3,570,364

4,078,612

8,130,328

1,395,248

4,509,719

1,158,320

15,550,859

131,303,794

29,374

512,959

59,968

691,807

3,876,834

16,051,120

110,603

1,026,050

(1913)86,386

9,763,069

34,423,180

+42.

British Honduras. . . .

+796.
+ 10.

+32.

Honduras

+189.
—29.

892,923

9,714,963

26,623,500

704,259

630,472

1,690,752

2,691,413

1,577,592

2,973,460

1,954,394

490,158

209,917

2,793,743

10,882,653

616,887

12,178,596

34,694.684

394,948

207,411

3,245

1,204,461

2,553,470
3,271,894
3,416,816
1,386,870
26,648
6,287,121
8,378,766

+87.

British West Indies . .
Cuba

+27.
+278.

Danish West Indies. .
Dutch West Indies.. .
French West Indies . .
Haiti

—92.
+147.
+ 175.

—42.

The Dominican Re-

+51.

+390.

British Guiana

Dutch Guiana *

French Guiana

—97.
—26.

+225.
+55.

+310.

Total

$71,524,505

$186,795,924

+161.

$84,615,922

$234,123,288

+176.

1 Included in Colombia prior to 1904.

1 Includes Panama prior to 1904.

* Imports to United States in average years about $50,000.

28 CARIBBEAN INTERESTS

The table on page 27 shows the recent increases and
decreases in the trade of the United States with the
Caribbean units.

Two sorts of foreign investments are prominent in
Caribbean affairs, those which involve loans direct to the
independent governments or to industries supported by
them, and those which are ventures in purely private
enterprises.

Undeveloped countries have had to rely for sur-
plus capital primarily upon European sources. For-
merly, American investors paid little attention to the
opportunities in the Caribbean. Exploitation of do-
mestic resources kept the money at home. During the
last generation, however, American capital has begun to
look abroad for new exploitation areas. The Carib-
bean holdings grew rapidly and now outrank those of
any other country. Until very recently the investments
made by American financiers have usually been of the
sort last mentioned. The money has gone into private
concerns, not those owned or supported by the various
governments. Statistics of the amount of money in-
vested are not available, but mention of some of the
more prominent American interests will indicate their
nature and importance.

The greatest rush of American capital to the Carib-
bean followed the Spanish-American War. It explains
in great part the rapid development which has resulted
in Cuba and Porto Rico. Consul- General James L.
Rodgers estimated in a detailed tabulation, in 1911, that
the American capital in Cuba, not counting in the pri-
vate wealth of the American citizens resident in the

INTEREST OF THE UNITED STATES 29

island, reached a total of $220,000,000. Other estimates
run as high as $450,000,000 and some as low as $100,-
000,000. The chief lines of investment were sugar mills
and lands, railroad properties, mercantile and manufac-
turing enterprises, public utilities, mortgages and
credits, and mines.1 Former Consul-General Frank
Steinhart estimated the American investments in 1912
at $400,000,000.2 A British Consular Report of 1912-
13 in speaking of the sugar industry, the basis of Cuban
prosperity, observed, "A very large proportion of the
mills are in the hands of Americans and it is probable
that not more than one-third of the mills remain in
Cuban hands."3 Cuban iron mines also are largely un-
der American control. The remarkable development of
Porto Rico since 1898 reflects in a similar way the en-
trance of American capital there.4

The refunding of the debts of the Dominican Repub-
lic was carried through by American capitalists. The
new bonds issued approximated $20,000,000. Follow-
ing the settlement American capital sought investment
there. An estimate in 1909, two years after the ratifica-
tion of the agreement with the United States, puts the

1 Daily Consular and Trade Reports, July 7, 191 1.

2 Interview published by New York Sun, May 30, 1912, quoted
in letter from Pan-American Union, March 25, 1914.

3 Diplomatic and Consular Reports (British) 1912-13 [Cd
6005-78]. The distribution is reported in Commerce Reports,
Sept. 29, 1915, as follows: Of 170 estates operating, 67 were
owned by Cubans, 43 by Americans, 42 by Spaniards, and 18 by
nationals of other countries.

4 Robinson, A. G. Commerce and Industries of Alaska, Hawaii,
Porto Rico, and the Philippine Islands, Washington, 1913, p. 58.

30 CARIBBEAN INTERESTS

total at that date at $3,000,000.* In discussing condi-
tions in the capital in 1912-13, the British Consul re-
ports, "There are many things wanting to bring the city
up to date, such as good waterworks and sewage sys-
tems, but they will no doubt come in the near future
now that the Americans have got such a footing in the
place. The largest sugar plantation is owned by an
American enterprise which is reported as spending
$500,000 on a new establishment. The price of land is
going up by leaps and bounds, and the Americans are
buying up large tracts all over the country."2 The
fruit trade is already under practically exclusive Amer-
ican control and investments are being made in the cocoa
industry. In Haiti, banking and railroad interests are
in the hands of American capital.

Central America shows the same development. The
railroads in Costa Rica, Salvador and Nicaragua are
backed by American capital. The fruit trade, which is
the life of the east coast, is American. An American
company owns the majority of the stock of the National
Bank in Nicaragua. Blueflelds, the old Mosquito In-
dian region, is now the center of American financial in-
terests grouped around Pearl Lagoon and Great
River.3 "Practically all the industries of Honduras,"
it is asserted, "are in the hands of United States cap-

1 Letter of Franklin Adams of the Pan-American Union. March
25, 1914.

2 Diplomatic and Consular Reports (British), 1912-13 [Cd
6005-212].

3 Diplomatic and Consular Reports (British) 1912-13 [Cd
6005-32].

INTEREST OF THE UNITED STATES 31

italists." 1 The United States firms control all the rail-
way-construction contracts and "at present all contracts
for public works, all concessions for railways, building
of customs houses, quays, etc., have been given to United
States contractors." 2

In Panama, of course, the greatest American invest-
ment is the Panama Canal. The Government also con-
trols the railroad. In the Bocas del Toro district,
American investments are dominant in the coconut, ba-
nana and cacao plantations.3 The same thing is true
further south in the banana plantations at Santa Marta,
Colombia, and in the British island of Jamaica. In Co-
lombia, the information available to our State Depart-
ment shows an investment of American capital of about
$3,000,000 in 1914.4 In Venezuela, the asphalt deposits
are controlled by American capital and important con-
cessions for oil development, rubber exploitation, and
transportation services are in the hands of citizens of
the United States.

These investments, even when totaled, do not measure
the extent of the American financial interest in the
Caribbean region for they take no account of the pri-
vate wealth of American residents and, of necessity, they
point out only some of the more striking investments.

In political, commercial and financial interests in the

1 Diplomatic and Consular Reports (British), 1912-13 [Cd
6005-133].

2 Ibid.

3 Diplomatic and Consular Reports (British), 191t-13 [Cd
6005-151].

* Letter from Department of State, March 24, 1Q14i.

32 CARIBBEAN INTERESTS

Caribbean, there is no nation which approaches the posi-
tion of the United States. The present importance of
our connections, the character of the developments, na-
tional and international, to be expected in the future
among the nations of the New World, and our geo-
graphical situation as the only great power near to this
region, give assurance that we will continue to occupy
here a position of primacy unlikely to be questioned.

CHAPTER III

RELATIONS OF THE UNITED STATES WITH THE
BRITISH WEST INDIES

THE LARGER ISLANDS

The most numerous and widely scattered of all the
European colonies in the Caribbean are the possessions
of Great Britain. Two outposts on the mainland, one
in South and one in Central America, constitute 88.7
per cent, of the superficial area of these holdings,
but in historical importance and in present economic
and political significance these are outdistanced by
the islands which stretch in a great bow over 1,900
miles of sea from Trinidad at the mouth of the Orinoco
to the Bahamas off the coast of Florida. In the days
of sailing ships these islands were a valuable line of
outposts from which British commerce could be pro-
tected. They were also before the days of beet sugar
a great source of supply for the sugar of Europe. Their
present importance is relatively less. The abolition of
slavery has, in some, made the problem of the labor sup-
ply acute, and capital, with the rise of substitutes for
cane sugar, has found them less profitable fields for in-
vestment. Until recently, indeed, their future seemed
anything but bright.

The total area of the British Caribbean colonies is

33

34 CARIBBEAN INTERESTS

111,425 square miles;1 90,277 square miles in Brit-
ish Guiana, 8,598 in British Honduras, 4,450 in
Jamaica and 8,200 in the smaller islands. The larg-
est island, Jamaica, is about four-tenths the size of
Haiti.

Comparisons of their trade development with that of
their neighbors are deceptive for many reasons, chiefly
because of the varying degrees of order in the different
communities. Counting in only the islands, though
their area is only 12,650 square miles compared to 18,-
045 square miles in the Dominican Republic, their for-
eign trade is still five times that of the Republic. On
the other hand, they make a less favorable contrast when
compared to the better developed regions, especially
Porto Rico. The latter, with 1,118,012 people com-
pared to 1,733,900 in the British West Indies, has an
area of only 3,436 square miles compared to their total
of 12,650. Yet the total foreign trade of Porto Rico
is four-fifths that of all the British West Indian islands.

In population, the British West Indies are typical of
all the islands, with the exception of Cuba and Porto
Rico. They are distinctly not a white man's country.
Trinidad, and to a lesser degree, Jamaica, like British
Guiana on the mainland, have resorted to the importa-
tion of East Indians to supplement the inefficient or
insufficient supply of labor furnished by the native
blacks. No important influx of other races has oc-
curred. White men do not take residence except as they
are employed in supervisory capacities on the planta-
tions or in business. From all present indications these

1 Not including Bermuda.

THE BRITISH WEST INDIES 35

islands are predominantly negro lands and are likely
to remain so.

The industrial developments which affect the Carib-
bean in general have touched the British possessions.
Some old industries, like sugar-cane raising, are again
increasing in importance, but the chief changes are in
the introduction or rapid development of comparatively
new industries such as fruit raising in Jamaica and
cocoa production in Trinidad. Less change has been
brought by the introduction of new capital. There has
been no rapid rise of foreign investments such as has
made possible the development of the commercial re-
sources of Cuba and Porto Rico in the last fifteen years.

JAMAICA

Jamaica is the largest, and was once the richest and
most highly prized, of British West Indian possessions.
For years the wealthiest of British subjects was a Ja-
maican. It was formerly not only self-supporting, but,
in return for a grant of freedom from imperial inter-
ference in law making, agreed to pay annually "an irre-
vocable revenue" to the Crown amounting to £8,000
Jamaica currency, an arrangement which continued
from 1728 to 1839.1

But the days of great prosperity are now history, and
the social, economic and political conditions of the island
are far from uniformly encouraging. The planter aris-
tocracy has disappeared, the former wide degree of
self-government has been cut down, the abolition of

1 Aspinall, A. E. The British West Indies, Boston, 1912, p. 301.

36 CARIBBEAN INTERESTS

slavery and the development of the beet-sugar industry
have brought financial difficulties which for years seemed
to assure a long-continued economic decline, a decline
not even yet altogether counteracted by the development
of the fruit industry.

The population of the island has shown a steady
growth in spite of unfavorable economic conditions.
This is especially true in the fruit-growing sections. In
the last twenty years the number of inhabitants has in-
creased 30 per cent., and at the census of 1911 stood at
831,383. The increase in population has been predom-
inantly black. Of the total in 1911, 630,181 were black,
163,201 were colored, 15,605 were white and the rest
were Mongolians, East Indians, and others unclassi-
fied. One-half of the population live an almost hand-
to-mouth existence and 100,000 have an average income
of about twelve cents per day.1 The island still offers
less attractive labor conditions than some of its neigh-
bors; witness the large number of negroes who went
from Jamaica to work on the construction of the Pan-
ama Canal compared to the small number who went from
Cuba and Porto Rico.

The colonial budget is still in a precarious position
and the debt,2 both absolutely and when considered in
the light of resources to be developed, is still far larger
than that of some other British Caribbean colonies.3

1 Daily Consular and Trade Reports, Aug. 17, 1910, and July
19, 1912.

2 The debt for 1913 is reported as amounting to $19,315,370.
Statesman's Year-Booh, 1915, p. 326.

3 The public debts of the other chief British Caribbean colo-

THE BRITISH WEST INDIES 37

The large estates which formerly supported a rich
planter aristocracy have been undergoing a process of
abandonment and parceling ever since the abolition of
slavery. Between 1839 and 1896 there were 518 estates
abandoned, and between 1896 and 1909, 64 were added
to the list. The plantation system has been gradually
yielding to holdings ranging in value from $100 to
$200, and there were reported in 1910 only 22,320 of a
value over $200. x Little more than one-seventh of the
estimated tillable acreage is cultivated.2 The chief crops
in order of acreage are bananas, sugar cane, coffee and
coconuts.

The hopes of the plantation owners still include a
desire for the revival of the sugar industry which once
made the colony so valuable. Until recently the out-
look has been uniformly discouraging. The acreage
under sugar has fallen steadily since 1869. The slaves
had been freed. Bounty-fed beet sugar forced down
the price of cane sugar and cultivation was no longer
profitable. To be sure, the year of greatest sugar ex-
portation did not come till 1887, when 46,000 short tons
were marketed abroad besides immense quantities of
rum, but this did not reflect a permanent prosperity and
the industry languished. Rum, even in late years, con-
stituted 10 per cent, of the value of the island's exports,
but rising excise taxes, especially in England and Ger-

nies are Bahamas, $236,115; Barbados, $2,1 84,500; Trinidad and
Tobago, $5,225,465; St. Lucia, $711,150; St. Vincent, $250; Gre-
nada, $618,350, and Leeward Islands, $1,334,250. Compiled from
Statesman's Year-Booh, 1914.

1 Daily Consular and Trade Reports, Aug. 17, 1910.

2 Statesman's Year-Booh, 1915, p. 326.

38 CARIBBEAN INTERESTS

many, have largely destroyed the possibilities of in-
creased economic stability in that branch of the industry.1

The government has not given up hope of building up
the sugar industry and announces that already "the re-
vival ... is commencing in earnest." 2 The natural
resources of the island and the developments in similar
regions, notably in Cuba and Porto Rico, seem to justify
the belief that with improved methods of cultivation, and
especially with better methods of extracting the juice
from the cane, sugar may again rank as one of the
island's chief sources of support.

Contemporaneous with the decline of the sugar in-
dustry has come an important development in another
branch of agriculture — fruit raising. Thus far this de-
velopment has been chiefly in banana growing. The
citrus fruit trade has not become important, partly be-
cause of the lack of adequate transportation facilities.
Oranges are easily grown but they cannot be shipped
with bananas because they give off carbonic acid gas,
which causes premature ripening,3 and the market has
not yet developed sufficiently to justify the making of
special shipping facilities. Further, the possibilities of
developing a profitable citrus fruit trade are limited by

1 Daily Consular and Trade Reports, August 28, 1913. The rum
exports have fallen in recent years from a value of $1,139,496 in
1909 to $326,546 in 1912. Sugar was exported to the extent of
only $646,263 in the same year.

2 Report of the Director of the Agricultural Department of Ja-
maica, 1909-10, quoted in Daily Consular and Trade Reports, Oc-
tober 7, 1910.

3 See Report of the Director of Agriculture of Jamaica, 1 909-10,
quoted in Daily Consular and Trade Reports, Oct. 7, 1910.

THE BRITISH WEST INDIES 39

adverse tariffs. This is not true in the countries of
northern Europe which have no home citrus fruit in-
dustry to develop, but it is unlikely that the American
growers of lemons, oranges and grapefruit will neglect
the use of the tariff to protect them against similar
products from islands under foreign flags.

If it were not for the banana industry the plight of
Jamaica would be sad indeed. The export fruit trade to
the United States explains the colony's fine steamship
connections, and without it all lines of foreign trade
would suffer. The fruit plantations have brought un-
der cultivation large tracts formerly lying fallow, and
through it neglected or abandoned properties have again
been made to yield good profits. Even as late as 1879
the banana exports were only 5.1 per cent, of the total;
they reached in late years from 40 to 50 per cent.1
Though Jamaica is not a one-product colony to the ex-
tent that many of the smaller West Indies are, its finan-
cial prosperity is thus largely and increasingly bound
up with that of a single industry.

Other branches of agriculture promise well but must
develop slowly on the basis of small holdings instead of
plantations. Thus, coffee is rapidly ceasing to be an
estate crop in Jamaica, as is also tobacco. The former
is now the second article of export. Tobacco can be
grown to advantage only by peasant farmers with a
large number of children who can help with the work.
The government experiments in its culture have been
disappointing, and the quality of the leaf is such that
difficulty is found in marketing the product. More

1 Daily Consular and Trade Reports, August 28, 1913.

40

CARIBBEAN INTERESTS

careful selection of seed, better methods of handling and
curing the crop may, however, make the industry
prosper.

What has already been said concerning the various
products of the island shows its dependence upon fa-
vorable commercial relations with the United States, for
here lies its great market. Almost three-fifths of the
exports go to our ports as compared with one-fifth to
the United Kingdom.1 We take practically all of the
four principal fruits shipped, and in some years as high
as 99 per cent, of the bananas.2 Jamaican coffee, how-
ever, like that from the other West Indies, has never
become popular in the United States, and most of it
goes to France. In the island's imports we also hold
first place.

The rising importance of American as compared to
British trade, next in amount in the island, is shown by
the following table.

The Share of Great Britain and the United States in
Exports and Imports of Jamaica

Exports

Imports

Year

Great Britain

United States

Great Britain

United States

1872

81.
62.
32.
21.
13.

10.
17.
50.
62.
60.

59.
55.
51.

48.
43.

23 .

1882

30.

1892

34.

1902

41.

1912

41.

In spite of our many steamship connections, the
freight rates to Jamaica, and this comment applies to

1 Daily Consular and Trade Reports, Oct. 21, 1914.

2 Ibid., Aug. 28, 1913.

THE BRITISH WEST INDIES 41

other islands of the West Indies as well, are high. They
are about the same as from Jamaica to Europe, although
the distance is much less.1 Better rates would doubtless
develop still further the interchange of goods, although
our present position is so favorable that marked im-
provement can be brought about only by an increase in
the standard of living of the average Jamaican citizen.
Enterprise in the island, additional investment of capi-
tal, and a higher standard of life must be present before
any great increase in commercial importance will be pos-
sible. As one of our consuls has reported, "Unless
these necessary elements are supplied, the United States
evidently has all the business on the island worth going
after."2

TRINIDAD

Most important of the British West Indies in imports,
and far the most important in export trade, is Trinidad.
Much less than half as large as Jamaica, its foreign
trade is greater than that of the larger island, and in
view of its possibilities for development, it boasts itself
the "Canada of the West Indies." At present the
chances of putting Trinidad upon a truly prosperous
basis are much better than in any other European colony
in the West Indies.

Not the least advantage which the island enjoys is the

1 Daily Consular and Trade Reports, July 19? 1912. To Bar-
bados, however, the rates are reported as appreciably less than
to Europe. Daily Consular and Trade Reports, Sept. 23, 1914.
This is due to the fact that the island lies on the route of vessels
going to South America.

2 Ibid., Aug. 17, 1910.

42 CARIBBEAN INTERESTS

character of its population, for there have settled here
the greatest single group of East Indian immigrants to
be found in the New World, and these men, it seems
generally agreed by those familiar with local conditions,
are "the men of the future" for the region in which Trin-
idad lies. It is beyond doubt, at least, that they have con-
tributed remarkably to the active labor supply and have
largely made possible the development which has oc-
curred in the colony. Of the total population of 365,-
000, "some 115,000 are East Indians and more than
200,000 are negroes, 'colored' or partly colored. Next
to these two races the Portuguese perhaps predominate
and then in order come the Spanish, French, Scotch,
Canadian, English and American, there being but few
of the last named." 1 Evidently, Trinidad, like Ja-
maica, is distinctly not a white man's country if it is to
be judged by the color of the present population. Prac-
tically thirteen out of every fourteen of the inhabitants
are of dark skins.

The agricultural possibilities of the island are declared
favorable for a wide range of tropical fruits. Oranges,
bananas, mangoes, limes, grapefruit, guavas, paw-paws
and avocado pears are easily grown and already figure
among the exports, but the lack of refrigerating facili-
ties on the steamships which visit the islands has thus far
hindered any important development similar to that in
Jamaica. The outlook for plantation rubber, however,
is encouraging.

Agriculture has been chiefly confined to raising cocoa,

1 Daily Consular and Trade Reports, Nov. 5, 1913, and Com-
merce Reports, Supplement, April 1, 1915.

THE BRITISH WEST INDIES 43

the present great source of the island's wealth. Of the
total area over one-third is under cultivation, and of
this about three-fourths is devoted to the cocoa crop.1
The product is not manufactured locally but is prac-
tically all shipped in the bean to other countries, chiefly
the United States, for manufacture. The colonists re-
alize that from the present outlook their prosperity de-
pends on the market for this crop, and all tariff arrange-
ments are negotiated especially with their effect on
cocoa-growing in view. In 1913, the chief hesitancy of
Trinidad in entering the Canadian Preference Agree-
ment, now in force, was due to the fear that giving Can-
ada a preference in her trade might result in the impo-
sition of duties on the cocoa sent to the United States,
which enjoyed free entry. The same concern was felt
by the growers in St. Lucia and Dominica.2

The other agricultural products of importance are
sugar and coconuts. The sugar industry has been de-
clining for a decade but, due to the European War, has
recently had a revival, the shipments being sent prin-
cipally to the home country. Coconuts are exported
chiefly to the United States. Rice growing is also in-
creasing in importance but, as yet, the demands of the
local market practically consume the supply.3

The most widely known resource of Trinidad is, of

1 Daily Consular and Trade Reports, Nov. 5, 1913. In 1914,
63,000,000 pounds were exported. See Commerce Reports, Supple-
ment, April 1, 1915.

2 Canada-West Indies Conference, Ottawa, 1913, pp. 43, 47 and
102.

3 Daily Consular and Trade Reports, Nov. 5, 1913, and Com-
merce Reports, Supplement, April 1, 1915.

44 CARIBBEAN INTERESTS

course, its apparently unlimited supply of paving as-
phalt. The "asphalt lake" continues to be the source of
an increasing output. Formerly, asphalt in its various
forms was the colony's chief export, but it is now ex-
ceeded in value by both cocoa and sugar.

Crude petroleum has also been found in good quan-
tity. This resource will become especially valuable with
the development of traffic through the Panama Canal,
and if the oil lands prove to be as extensive as is now
claimed, a result many outsiders feel unlikely, it will
make Trinidad one of the chief fuel-oil supply stations
of the world.1

Trinidad occupies a favored position as a trade cen-
ter for the West Indies south of Cuba, and for northern
South America. Its location has led to the development
of an important transshipment business which contrib-
utes to prosperity. It is also becoming one of the im-
portant coaling stations of the West Indies. The im-
ports of coal from the United States reach a value of a
quarter of a million dollars annually, not counting the
large quantities taken by steamers which are not entered
at customs.

The proportion of the foreign commerce of Trinidad
falling to the United States is large. In recent years
first place has been held by the United Kingdom and
the United States alternately, each taking about one-
third of the total. The chief articles sent to Great
Britain are, in order of importance, sugar and cocoa.
To the United States the main exports are cocoa and

1 Daily Consular and Trade Reports, Nov. 5, 1913, and Com-
merce Reports, Supplement, April 1, 1915.

THE BRITISH WEST INDIES 45

asphalt. The only other country figuring prominently
in the account is Venezuela. Trade with the latter coun-
try is composed to a large extent of transshipment of
goods.1

Of all the colonies parties to the agreement, Trinidad
is the most affected by the provisions of the Canadian
Preference legislation of 1913. The effect of this
measure on trade with the United States, judging from
the first two years of its operation, will be unfavorable.
Many of the most important economic interests in the
island, notably the cocoa business and the asphalt in-
dustry, are either controlled by American capital or feel
that the American market is not to be sacrificed for
whatever advantages may be reaped from closer rela-
tions with Canada. This point of view was repeatedly
voiced by the cocoa growers during the conference pre-
ceding the Preference Act. Unlike the sugar estates,
the cocoa plantations are in the hands of a large body
of resident owners. In 1913, there were 28 sugar plan-
tations held by thirteen companies, most of the owners
of which were non-residents. But there were over 500
estates producing cocoa, the owners of which were
largely resident.2 Over half of the local product is
shipped to the United States and the planters are anx-
ious to retain the market. Any move on the part of the
United States to retaliate for Canadian preference
would seriously affect the industry both in Trinidad and
Grenada, "particularly as the cocoa industry [would]

1 Commerce Reports, Supplement, April 1, 1915, and Commerce
Reports, Supplement, Sept. 4, 1915.

2 Canada-West Indies Conference, Ottawa, 1"913, p. 102.

46 CARIBBEAN INTERESTS

have to bear its share of any extra taxation . . . neces-
sary to make good any loss of revenue due to the estab-
lishment of the preference." 1

1 Canada-West Indies Conference, Ottawa, 1913, p. 102.

CHAPTER IV

RELATIONS OF THE UNITED STATES WITH THE
BRITISH WEST INDIES

The Smaller Islands and Mainland Colonies
BARBADOS

Third in commercial importance among the single
islands of the British West Indies is Barbados. Its for-
eign trade is rather less than one-half as great as that of
Jamaica and slightly more than one-fourth that of Trini-
dad. Like Jamaica, it is essentially a black colony and,
in recent years, conditions of employment have not been
favorable. The island exported to Panama many of
its laborers to help in the construction of the canal. Like
Jamaica, too, its history has been closely bound up with
sugar production, but unlike the larger island the
changes in the industry have not caused the abandon-
ment of the plantations or their adaptation to other uses.
Barbados was long ago a sugar colony. In fact, it was
the first successful sugar colony of Great Britain in the
West Indies and a sugar colony it is today.

In many ways it is the most interesting of the
smaller British-American possessions. Its high state
of cultivation, its picturesque landscapes, its well kept
plantations, on which steam-driven machinery has even
yet displaced only in minor degree the enormous wind-

47

48 CARIBBEAN INTERESTS

mills for grinding sugar cane, all combine to make it a
favorite resort for tourists from both Americas.

Unlike certain other British West Indies, Barbados
has not found the United States the best market for its
goods. The sugar tariffs heretofore have turned the
shipments to British ports, especially to British North
America.1 The United States takes less than a tenth of
the exports, the only important item being molasses.

In the imports of the island our trade holds a more
important place. In recent years we have furnished
between a fourth and a third of the total. We market
there more than twice as much as the British North
American colonies and almost four-fifths as much as the
United Kingdom. The chief articles now sent are ones
which regularly figure largely in our West Indian trade,
namely, provisions and coal.2 Furthermore, there is lit-
tle opportunity for trade expansion in Barbados. It
has been intensively cultivated for a century, and in-
creased sales can come only with a rise in the standard
of life and improved manufacturing methods. Never-
theless, it is not encouraging to find the United States
steadily losing in the percentage of the trade handled.
We formerly furnished practically all of the horses,
mules, corn, oats, and flour. Argentina and Uruguay
are now supplying the animals and Canada is cutting
into the foodstuffs trade. Canada has the advantage
of a subsidized line of steamships and since June 2, 1913,

1 Commerce Reports, Supplement, September 4, 1915, and Daily
Consular and Trade Reports, December 16, 1914.

2 Daily Consular and Trade Reports, October 24, 1914, and
December 1 6, 1914.

THE BRITISH WEST INDIES

49

has a tariff preferential of 20 per cent, on some com-
peting articles and 24 cents per barrel on flour. Our ex-
ports to Barbados, therefore, seem not likely to prosper.
Barbadian cane products have recently shown a ten-
dency to rearrange their order of importance. Sugar,
formerly the mainstay, now occupies a less important
position. With trifling exceptions, only the light-
brown grade is produced and the greater bulk of it is
shipped out of the country for refining. Rum produc-
tion, once an important by-product, is now declining,
due to causes elsewhere discussed. Molasses, however,
has in some recent years raised itself from the position
of a by-product to the most important individual item of
export. Barbados, in fact, should perhaps be called
a molasses island rather than a sugar island.

THE WINDWARD ISLANDS

In the same region as Barbados, and sometimes
treated with that colony as a single group, are the
Windward Islands, consisting of Grenada, St. Vincent,
the Grenadines and St. Lucia. In a general way, the
group skirts the eastern rim of the Caribbean Sea from
the French colony of Martinique to Trinidad. All are
essentially black colonies. The three larger islands1 to-

1 The following statistics, compiled from the Statesman's Year-
Booh, 1914, show their importance:

Area
sq. miles

Population

Acres under Cultivation

Grenada

133
140
233

66,750 (1911)
41,877 (1911)
48,637 (1911)

30,200 (1912)
20,000

St. Vincent

St. Lucia

50 CARIBBEAN INTERESTS

gether are next to Barbados in commercial importance
and are all markedly dependent on single crops.

Grenada, the most populous and most thickly settled,
was formerly important in the growing of sugar cane,
but its production and that of the by-product, rum, are
both now decreasing. The island is readjusting itself
to new economic conditions. The cocoa trade is grow-
ing and the production of spices is important. In fact,
cocoa promises to be the big crop of the future in the
entire group, as is already the case in the neighboring
colony of Trinidad. It is already the greatest crop of
Grenada. One of the West Indian representatives in
the Canadian Tariff Conference declared the island pro-
duced "almost nothing else" and in St. Lucia it is al-
most as important as the sugar crop.1

Historically, St. Lucia has played a much more im-
portant part than its resources indicate. It was the
scene of an early dispute over possession between France
and England, and it was long an important British naval
base from which watch was kept upon the French ships
stationed at Port Royal, Martinique. Now it has set-
tled down to an uneventful reliance on sugar, cocoa and
rum. Its garrison has been withdrawn and the Brit-
ish fleets no longer enliven its harbor. Its black popu-
lation is unenterprising, and under present conditions
there seems to be no great future for the colony.

St. Vincent is famous because especially suited to the
growth of sea island cotton. It is claimed that the best

1 Canada-West Indies Conference, Ottawa, 1913, p. 27. Of the
exports valued in 1911 at $1,267,871 cocoa accounted for $1,085,736.
Daily Consular and Trade Reports, November 5, 1913.

THE BRITISH WEST INDIES 51

long-staple cotton in the world comes from its planta-
tions. Over one-fourth of its cultivated lands are de-
voted to this, its most important product, but cotton
yields to arrowroot as the most distinctive product of
the island.

Arrowroot, the name being applied both to the plant
and its manufactured product, is a form of starch es-
pecially suited for use in the manufacture of chocolate.
Thus far the island has a practical monopoly of its pro-
duction for the world trade, although there is apprehen-
sion that its cultivation may be found profitable in Cuba
or Porto Rico, a development which would seriously
impair the basis of the island's prosperity.1 In good
years the island produces about 5,000,000 pounds. To-
gether, cotton and arrowroot constitute almost four-
fifths of the island's exports.2

Like Barbados, the Windward Islands send their ex-
ports largely to British ports, but chiefly to the home
country, not to Canada. Our trade with Grenada and
St. Lucia, in spite of the cocoa production of the islands
for which we might bid, is negligible.3 The sea island
cotton of St. Vincent is "wholly exported ... to the
United Kingdom" 4 and two-thirds of the arrowroot has
that destination. The United Kingdom and British do-
minions take practically all the exports and are the main
sources of the impprts of the group. Lack of trade with

1 See testimony of Mr. Griffith, advisor for St. Vincent in the
Canada-West Indies Conference, Ottawa, 1913, pp. 30, 65.

2 Daily Consular and Trade Reports, July 2, 1913.

3 Ibid., Nov. 5, 1913, and July 2, 1913.

4 Memorial of St. Vincent quoted in Canada-West Indies Con-
ference, Ottawa, 1913, p. 69-

52 CARIBBEAN INTERESTS

the United States is due in part to the fact that we have
no direct steamship connection with the islands, while
Canada has one line and the United Kingdom has three.1

THE LEEWARD ISLANDS

Lying north of the Windward chain and southeast of
the American colony of Porto Rico are the Leeward
Islands, which as a group illustrate the distinctly one-
product character of many of the West Indian col-
onies. The principal islands are Antigua, St. Kitts-
Nevis, Dominica, Montserrat and the Virgin Islands.
None of the West Indies presents from the sea a more
pleasing appearance than do these outposts of the Brit-
ish Empire. Their hills rise green-clad from the sea to
be swept by steady sea breezes and brightened by a sel-
dom failing sunshine. Close at hand they give a less
idyllic picture. The population is predominantly black
and tends to become blacker. Between 1901 and 1911
the number of people on three of the larger islands de-
clined. In Dominica it increased, but for the group as
a whole a loss was registered.

Dominica, with an area of 305 square miles, is almost
three times the size of Antigua, the next in size and
population. Aside from its commercial position, the
island is interesting because it contains the last remnants
of the Carib race which Columbus found in the West
Indies on the discovery of America. Their numbers
have gradually dwindled and by intermarriage with
negroes, the purity of their blood has been largely lost

1 Daily Consular and Trade Reports, July 2, 1913.

THE BRITISH WEST INDIES 53

until now those of unmixed race hardly count more than
a hundred.

Unlike the neighboring islands, however, population
conditions in Dominica are encouraging. In the period
1901-11 the number of inhabitants increased almost 15
per cent, in response to changing economic conditions.
The economic prosperity of recent years is due almost
solely to the development of a single industry, the grow-
ing of limes,1 which has been fostered by the govern-
ment with unusually successful results. During the six
years preceding 1914 the government nurseries disposed
of 326,000 lime trees to planters and large numbers
raised privately were also planted. As a result of this
enterprise and the better care given trees already in
bearing, the exports of green limes have increased re-
markably. The principal market for the fruit in this
condition is New York.

But the trade in green limes is not so important as
that in raw and concentrated lime juice, both of which
products have long been well known on British mar-
kets. The island produces about 150,000 gallons of the
former and over half a million gallons of the latter.
The lime products exported reach a value of almost
two-thirds of the total. The popularity of all lime prod-
ucts in the United States is rapidly growing, and as a
consequence this country now occupies second place in
the foreign trade of the colony.2

1 See discussion in Daily Consular and Trade Reports, Sept. 27,
1913, and Commerce Reports, Supplement, Sept. 4, 1915.

2 Commerce Reports, Supplement, Sept. 4, 1915, and Daily Con-
sular and Trade Reports, April 8, 1914, and July 2, 1913.

54 CARIBBEAN INTERESTS

Antigua, St. Kitts-Nevis and Montserrat figure more
in history than in present-day commerce. They were
the haunts of the buccaneers and the scene of disputes
for possession, which now seem all out of proportion to
the importance of the issue. They have little to dis-
tinguish them. Their population is black and their re-
sources, almost wholly agricultural, bear little contrast
to those of the neighboring islands. In all but the last
sugar is the most important product. In Montser-
rat, as in Dominica, the lime industry is being de-
veloped.

The Virgin Islands, fifty-eight square miles in area,
with a population of about ten to the square mile, con-
tain all the rest of the Leeward group, except the Danish
West Indies and Crab Island, which belongs to the
United States. The people are chiefly negro peasant
proprietors who grow cotton, sugar, and limes. Com-
mercially, the islands are unimportant.

Due to the character of their products and communi-
cations, the Leeward Islands have been closely connected
by trade with the home country. The popularity of
lime juice with the people of Great Britain is proverbial.
Its preeminence among Leeward Island products and
the fact that it is easily transported and keeps indefi-
nitely have combined to make it one of the means by
which the home country has kept first position commer-
cially. As has already been shown, however, a market
for these products in the United States is also develop-
ing and the growth of the green-lime industry, which
necessitates prompt marketing, may mean the further
extension of a market in which, because of her position,

THE BRITISH WEST INDIES 55

the home country cannot enter as a competitor on equal
terms.

The total trade of the group is about evenly divided
between imports and exports. The United Kingdom
furnishes about forty per cent, of the imports and other
British colonies about half as much. The United States
furnishes thirty-four per cent. What the effect of the
Canadian- West Indies Preference Act will ultimately
be on the islands' trade is as yet problematical.1

BAHAMAS

The Bahamas are a British colony once well known,
or notorious, in the United States. Nassau, the head-
quarters of the blockade-running steamers in the Civil
War, became for a time a prominent transshipment port.
It is now off the route of important international trade
and the colony as a whole is far from prosperous.
Though they are nearly two and a half times the size
of Trinidad (1,754 square miles) and considerably
larger than Jamaica (4,200 square miles), the Bahamas
(4,404 square miles) are by far the least important of
all the larger groups of the British West Indies. Their
foreign trade in 1914-15 was about one-twelfth the value
of that of Trinidad. In their territory, two hundred
and thirty-one times that of Bermuda, there live, accord-
ing to the estimate of 1914, some 50,766 people. Yet
Bermuda, with its somewhat more than nineteen square
miles of territory and forty per cent, of the population,

1 For a discussion of the effects of tariff changes introduced in
1910, see Daily Consular and Trade Reports, Nov. 29, 1912.

56 CARIBBEAN INTERESTS

has a trade greater than that of the Bahamas.1 The
twenty inhabited islands and many uninhabited islets
and rocks scattered over a distance of seven hundred
miles in the sea off the southeast coast of Florida have
scant possibilities of commercial development. Less
than one-sixth of their population are of white blood,
and it is practically stationary. It is now reported to
be declining, and there is a continued emigration of the
laboring class to Florida.2 The ownership of almost
six-sevenths of the land is in the Crown.

Until recently, the important products have been
sponges and turtle shell, both indicative of the compara-
tive sterility of the island's soil. Like many of the
West Indies, the Bahamas are now revolutionizing
their industries in the adjustment made necessary by
changed conditions locally and in the world market. The
turtle-shell industry has steadily declined in recent years
and the European War temporarily put an end to the
industry. The sponge industry is static, but threatened
with a decline as the take of wool sponges, the chief va-
riety harvested, has outrun the production. The Marine
Products Board has urged that an effort be made to
counteract the decline by the introduction of the Med-
iterranean sponge.

The outlook would be dark but for the promise of the
recently developed sisal industry. Though carried on
under crude methods, the growing of this product has

1 This comparison is made, for Bermuda, from the statistics of
1912 in the Statesman's Year-Book ; for the Bahamas, from the
Daily Consular and Trade Reports, September 28, 1914.

2 Daily Consular and Trade Reports, September 28, 1914.

THE BRITISH WEST INDIES 57

increased in popularity and it now occupies second place
among" the colony's exports.1 The citrus-fruit industry
is here, as in the other West Indies, hindered in its nor-
mal development by the tariff charges in the United
States. There is, however, an increasing production of
pineapples, which are canned for export, and of vege-
tables for the early spring trade with the United States.

Lying so close to the United States as they do, we
should expect the larger portion of the trade of the Ba-
hamas to go to the neighboring republic. This is, in
fact, the case. Of the total, the United States supplies
about three-fourths of the imports and takes almost 50
per cent, of the exports. The principal articles of
import are foodstuffs and textiles. The chief exports
are sponges and sisal hemp, which together form about
four-fifths of the goods marketed abroad. Practically
all of the hemp and almost a fourth of the sponges go to
the United States.2

Possibly the most extreme illustration of the economic
dependency of the West Indies is furnished by the
Turks and Caicos Islands, two groups of the Bahamas
which are politically a part of Jamaica though they are
economically a separate colony. The population in
1911 was 5,600, of which only 280 were white. News
from the outside world arrives only through steamers
and through a weekly Government gazette. There is
no telegraph service nor public telephone. Accounts

1 See Daily Consular and Trade Reports, Oct. 6, 1913; June 25,
1914; June 30, 1914; and September 4, 1915.

2 See Daily Consular and Trade Reports, Sept. 28, 1914, and
Commerce Reports, Supplement, Sept. 4, 1915.

58 CARIBBEAN INTERESTS

are kept in American currency and United States coins
are used interchangeably with British. Vegetables can-
not be raised. Except for a small production of
sponges and sisal hemp, the only commercial product is
salt, produced by evaporating sea water. The com-
munity is far from prosperous and often is reduced al-
most to the margin of subsistence. Time was when
Turks Islands salt, which the Imperial Institute of
London reports as 99.42 per cent, pure, enjoyed wide
reputation and popularity. It is said its use was for-
merly required in the preserving of meat for the army
and navy of the United States. Those days are gone,
but salt raking is still the colony's source of life. Salt
forms about 75 per cent, of the total exports. Of salt
exports above three-fourths goes to the United States
as do practically all the sisal hemp and sponges.1

BERMUDA

Bermuda is classed among the West Indies in sta-
tistics published by the United States Government,
though by position and character it is properly a sep-
arate group of islands. It differs from the other Brit-
ish West Indies in many ways. Lying 1,475 miles
north of Trinidad and 580 miles east of Cape Hatteras,
the islands are rather a halfway house on the road to
Europe than an integral part of the group of colonies
which includes Trinidad at the mouth of the Orinoco
and British Honduras on the border of the disturbed
Central American republics.

1 Daily Consular and Trade Reports on Turks and Caicos Islands
were issued April 4, 1913, and August 27, 1913.

THE BRITISH WEST INDIES 59

Little more than nineteen square miles in area, these
360 small islands, some twenty of which are inhabited,
have long been noted for their beautiful scenery and
equable climate. The colony is practically station-
ary in population at slightly less than 20,000, of whom
less than one-third are whites.1 It is the most impor-
tant naval base for the British forces in the west At-
lantic.

The review of the colonies already discussed must
have impressed the reader with the extent to which these
scattered possessions may be called "one-product colo-
nies." In almost every one some one article plays so
important a part in its foreign commerce that the suc-
cess of a single crop and the activity of its market de-
termine the prosperity of the entire community. In
this respect Bermuda is no exception. Trinidad lives
on cocoa, Jamaica on bananas, Barbados on sugar and
molasses, Turks Islands on salt, British Honduras on
mahogany, St. Vincent on arrowroot, Dominica and
Montserrat on lime juice and Bermuda on vegetables,
chief among which are potatoes and onions. Ninety-
two per cent, of the latter islands' exports in 1914 were
vegetables, and of these about 90 per cent, go to the
United States.2 Of the islands' imports, the United
States furnishes two-thirds. Stated in another way, the
United States ships more goods to Bermuda and buys

1 The census of Dec. 31, 1911, gives the population as 19,152,
of whom 6,820 were whites. Statesman's Year-Book, 1914.

2 Daily Consular and Trade Reports, Oct. 8, 1913, Commerce
Reports, Supplement, Sept. 4, 1915, and Daily Consular and Trade
Reports, October 14, 1914.

60 CARIBBEAN INTERESTS

more from the colony than all other countries com-
bined. Without the North American market, Bermuda
would be only an out-of-the-way-island port of call in-
stead of a fairly prosperous colony of 20,000 people on
a total cultivated area of 4,000 acres. Like Switzerland,
Bermuda is finding its climate a natural resource of no
mean value. Here, it is winter travel which helps fill
the pockets of the inhabitants. The tourist trade from
New York is constantly growing and the islands' nat-
ural advantages are such that this source of income
seems sure to become of increasing importance. The
tourists visiting the island now number about 28,000 an-
nually, or almost one and a half times the resident pop-
ulation, and spend, it is estimated, from $750,000 to
$1,125,000 annually in the islands. Direct steamship
connections with the United States foster this travel as
they do our trade relations with the colony. Judged
from the point of view of imports, exports, or tourist
trade, Bermuda is economically an appanage of the
United States, dependent for its prosperity upon the
prosperity of its market and the favorable customs
duties granted to its products.

BRITISH HONDURAS

Though British Honduras, like British Guiana, is
not properly classed as among the West Indies, it may
be treated here for the advantage of comparison with
the other colonies of the United Kingdom. In area, its
7,562 square miles give it rank after the other mainland
division. It is the smallest of the Central American

THE BRITISH WEST INDIES 61

units, with the exception of Salvador. Its 37,000 in-
habitants number less than twice the population of Ber-
muda, although it is nearly 380 times as large. The
United States sends to the colony goods of greater value
than any other country, reaching almost 50 per cent, of
the total, the principal items in order of importance
being provisions, textiles and machinery. Of the col-
ony's exports we take far more than all other countries
combined.1

British Honduras figures in export trade almost ex-
clusively in vegetable products though, unlike the Cen-
tral American countries, the first place is taken by woods
instead of fruits. The latter are, however, growing in
importance. Chicle gum, formerly a leading product
exported exclusively to the United States, is now fall-
ing in amount though the shipments, even in recent
years, have constituted one-third the value of the ex-
ports. Mahogany and cedar exports are rapidly in-
creasing, especially to the United States. In 1897, the
great mahogany resources of the colony were drawn
upon by the United States for only 50,000 feet, but in
1914, 9,993,120 feet were taken.

The natural market for the region is the United
States; fruits are sold there almost exclusively; and
Americans are the only important consumers of ma-
hogany and cedar. The development of the American
market has brought prosperity to the colony, and ex-
ports are rapidly increasing though the population is
not. The budget no longer shows receipts as less than

1 Commerce Reports, Supplement, May 1, 1915. See also Daily
Consular and Trade Reports, December 20, 1912, and May 1, 1913.

62 CARIBBEAN INTERESTS

expenditures, a condition which there is every reason
to believe will continue.

BRITISH GUIANA

Largest in area, but by no means greatest in im-
portance among the Caribbean colonies of the United
Kingdom, is British Guiana. Eighty-nine thousand
square miles in extent, or about equal to French and
Dutch Guiana combined, it comprises tropical areas for
which great hopes have been held. Less than 300 square
miles are under actual cultivation. On this area live
almost three hundred thousand people.1 Settlements
fringe the coast and the rivers, but the interior is prac-
tically untouched except for the gold workings. Roads
formerly well kept are now impassable. The per capita
trade strength of the colony is far below what it was a
century ago. Then, the foreign trade is asserted to
have been $100 per capita. It is now less than $30.
Sugar, formerly a prosperous industry, has declined.
The well kept plantations of the slavery days are gone,
and in 1914 there were only forty plantations in opera-
tion. The sugar production remains about constant at
100,000 tons annually.2 Cotton and cocoa production
were formerly more important than at present. The
future of the colony is declared to be dependent upon
the success attending East Indian immigration.

New products have somewhat relieved the depression

1 Rodway, James, Guiana, London, 1912, p. 232.

2 Bayley, G. D. Handbook of British Guiana, Georgetown, 1909.
See also Commerce Reports, Supplement, April 29, 1914. Daily
Consular and Trade Reports, Dec. 17, 1913.

THE BRITISH WEST INDIES 63

caused by the decline of the colony's former staple in-
dustries. Rice has gradually been gaining on sugar
cultivation. The low lands of the coast are well suited
to this crop, which is said to have great possibilities of
increase. The colony is already the most important
rice-raising district of the West Indies, the only one
which contributes heavily to export. With the excep-
tion of one American plantation, the industry is carried
on on small holdings. East Indian labor is generally
used. Balata, a low-grade rubber gum, is also becom-
ing an important export. Of the imports the United
States furnishes about one-fourth, the United Kingdom
about one-half. Of exports the United States takes
less than ten per cent., the United Kingdom and Can-
ada forty per cent, each.1 The imports from the United
States are predominantly foodstuffs, from the United
Kingdom textiles and foodstuffs. Sugar forms about
two-thirds of the exports, followed by gold, rum, balata
and rice.

THE ECONOMIC POSITION OF THE BRITISH COLONIES

The last twenty years, which have seen such remark-
able changes in the basis of industry in the British West
Indies — changes usually for the better, have brought
aLo a marked shifting in the position of the United
States toward them. Formerly, with the exception of
sugar and molasses, there was small importation of
Caribbean products to our ports. We took compara-

1 Daily Consular and Trade Reports, Dec. 17, 1913. Commerce
Reports, Supplement, April 29, 1915, and Commerce Reports, Sup-
plement, Dec. 27, 1915.

64 CARIBBEAN INTERESTS

tively small amounts of their coffee and cocoa. The
fruit trade was just beginning to be important.

But several influences have now changed our point
of view and have made our country's market, always im-
portant for the West Indies, now the greatest consid-
eration of their commercial policies. First, they have
changed their products. Cocoa and fruits are now pro-
duced in enormous quantities. We are the best cus-
tomer, and for practical purposes, the sole customer in
the fruit trade. We are more important to them than
formerly. Secondly, we have changed our industries,
with the result that in some lines of trade they have be-
come less important to us. We now produce at home
large quantities of some of the products which could be
supplied from the West Indies. Our southern cane
fields and our beet sugar fields give us home-grown
sugar and we are raising our own citrus fruits.

Thirdly, we have enlarged our territorial holdings
and have by special treaty agreements come into close
relationship with tropical territories. Still other agree-
ments of a similar sort are not unlikely to be made in
the near future. These arrangements operate to dis-
courage the trade of communities not favored. Porto
Rican, Hawaiian and Philippine sugars have received
and probably will receive favors above foreign sugar.
The industries in these communities add their voices to
those in the states proper for the maintenance of tariffs
against foreign West Indian products. Some conces-
sions will probably be made to the protectorate areas.
We already favor Cuban as against other foreign West
Indian products, and the conclusion of other tariff ar-

THE BRITISH WEST INDIES 65

rangements granting special favors to the other coun-
tries to which we are closely allied politically may fol-
low. The economic effect upon the British West In-
dies will not increase their prosperity.

The position of the foreign-owned West Indies may
therefore become continually less favorable as the United
States develops a comprehensive West Indian tariff
policy. Instead of a relation of mutual dependence,
which would have been the result had the political and
economic conditions of two decades ago remained un-
changed, the present relations tend to become those be-
tween a large power economically independent and a
group of small communities whose prosperity depends
in large degree on the tariff favors which the northern
republic grants. The European colonies are con-
fronted by the alternative of finding a market elsewhere
for their products, a course rendered difficult because
of the nature of their chief articles of export, or of find-
ing themselves in an increasingly unfavorable position
of economic dependence.

The disadvantage of such a situation has not escaped
the attention of those directly concerned. In the Cana-
da-West Indies Conference of 1913, as has already
been shown, the representatives of the islands were anx-
ious that the arrangements made should be of such a na-
ture that the chance of retaliation by the United States
should be reduced to the minimum. Referring to the
new conditions brought about by the recent political de-
velopments and the altered policy which they counseled
for the British colonies, Mr. George E. Foster, Cana-
dian Minister of Trade and Commerce, in his opening

66 CARIBBEAN INTERESTS

address pointed out that there has come a great change
in the position of the British West Indies — "the United
States has now within her own territory or affiliated to
her by special treaties, a tropical area which goes far
toward satisfying her own wants. . . . As these coun-
tries now have advantages which are not enjoyed by the
British West Indian islands a complete reversal of the
position of things . . . has taken place. . . . We are
more and more driven to come to each other for our mu-
tual advantage." 1

The dissatisfaction felt at the situation has found ex-
pression in pessimistic publications, both in the islands
and in the home country. It was urged at the time
when the Canadian agreement was under consideration
that "For us to declare preferential treatment in favor
of Canada, on goods which we now get from the United
States, would undoubtedly prove to be an experiment
which would bring about certain ruin to the West In-
dies; more so in the case of Jamaica, which is almost
entirety dependent on her markets." It was feared that
the maximum tariff provision of the Payne-Aldrich
Tariff bill might be applied on the plea that the tariff
agreement constituted unfair treatment of United States
trade.2

Mr. Richard Jebb, in an article on "The West Indies
and the Empire" in the London Standard, sees in the
present economic position of the United States a men-

1 Canada-West Indies Conference, Ottawa, 1913, p. 4.

2 Meikle, L. S. Confederation of the British West Indies ver-
sus Annexation to the United States of America. London, 1912, p.
120.

THE BRITISH WEST INDIES 67

ace to European control. He declares, "The present
gravitation towards the United States would be counter-
acted, not only for the British, but also for the other
islands, by a new center of attraction in a vigorous Car-
ibbean Confederation under the British flag inspired
with the sense of a future political welfare full of possi-
bilities." l The more radical West Indian party also be-
lieves that political reorganization might have a favor-
able influence. They declare for "Confederation of the
British West Indian Colonies, with responsible govern-
ment, as the only means of checking ultimate annexation
to the United States of America." 2

But the West Indies, as shown by the expressions of
opinion by their official representatives, will be slow to
court trouble with the 100,000,000 people of the United
States, who will naturally remain potentially their best
customers.

1 Quoted in Meikle, op. cit. p. 181.

2 Meikle, op. cit. pp. 253-4 and passim.

CHAPTER V

THE MINOR COLONIES OF THE CARIBBEAN

The minor colonial possessions in the Caribbean
region belong to three powers: France, Holland and
Denmark. From the point of view of population, or
commerce, or as a field for future settlement, none of
these colonies seems destined to play a prominent role.
The value of those on the mainland depends upon the
changes in tropical settlement which will be brought by
the triumphs of science over nature. The prosperity
of the islands depends on their relation to the great trade
routes which pass their ports. These may give them a
commercial and military importance far beyond what
their natural resources assure. The first two groups
are each formed of a comparatively large colony on the
mainland of South America and a number of small
islands. Both represent what is left of the colonial
empires once held by France and Holland in America.

THE FRENCH COLONIES

France, Spain, and Portugal all once possessed great
colonial empires in America which they have lost. The
latter two have been entirely eliminated by the events
of history; the first possesses only a shadow of her for-
mer possessions. With the exception of the two small

68

MINOR CARIBBEAN COLONIES 69

islands, St. Pierre and Miquelon, the land basis of the
French fishing fleet off Newfoundland, all that remains
of the American colonies of France are found in the
West Indian region. Not of great intrinsic importance
— even the French themselves recognize that these pos-
sessions lie too far off the trade routes to become im-
portant commercial centers — these colonies are interest-
ing as an illustration of what may be accomplished in
the development of a territory by following a highly
nationalistic policy.

From the point of view of foreign trade, the French
West Indies furnish a strong contrast to the other
European colonies. It has been the policy to adhere
to the old doctrine that the trade of a colony should be
assured to the mother country. "Imports from foreign
countries are subject to heavy duties" while French
goods pay only a light octroi de mer. The regular
French tariff rates apply except to a limited number
of articles, necessary for the existence of the colony,
which France cannot well supply. These latter come
chiefly from the United States. In their export trade
the French West Indian colonies are favored by free
entry of their goods into France. Rum brings a better
price in France than can be secured elsewhere. Sugar
and rum form over four-fifths of the exports of Mar-
tinique, and practically all that shipped goes to France.1
The same products predominate in the export trade of
Guadeloupe, which goes practically entirely to French
ports.2 The French advantage appears in a striking

1 Commerce Reports, Supplement, September 29, 1915.

2 French customs returns for 1912, quoted in Daily Consular

70 CARIBBEAN INTERESTS

manner in the import trade, though the United States,
due to its proximity and to the fact that it can supply
foodstuffs and lumber cheaply while France cannot, is
an important source of the islands' supply.1

These two small islands furnish a good illustration of
the development to which tropical territories may be
brought even if they are purely agricultural. Their
foreign trade, in 1912, reached for imports $7,921,575
and for exports $10,925,295,2 or a total of $18,846,870,
this, although the islands have a combined area of only
968 square miles and a population of 396,434, largely
black. Compared to the showing of Costa Rica, the
most stable and commercially most important of the
Central American republics, this trade is large. The
populations of the two are practically equal. Although
manufactures are negligible in both and reliance is on
simple agricultural industries, the foreign trade of the
French islands is greater than that of the republic,

and Trade Reports, Sept. 27, 1913, give the following figures:
Guadeloupe exports, 1911, $3,907,379, of which to France and
French colonies, $3,857,987- Guadeloupe exports, 1912, $5,034,-
270, of which to France and French colonies, $4,952,963.

1 Ibid. Guadeloupe imports, 1912, from France and French
colonies, $2,436,813 or 61.9 per cent.; from the United States
$803,449, or 21.3 per cent. Martinique imports from France $2,-
058,168, or 48 per cent; from United States, $1,545,896, or 36
per cent.

2 Commerce Reports, Supplement, September 29, 1915, March 9,
1916, March 17, 1916. French Customs returns for 1912, quoted
in Daily Consular and Trade Reports, September 27, 1913:

Imports Exports

Guadeloupe $3,768,155 $5,034,270

Martinique .... 4,153,420 5,891,025 (including reexports)

MINOR CARIBBEAN COLONIES 71

though the latter is almost twenty-five times as large and
has natural resources even more disproportionate.

Still it is not to be supposed that the condition of the
French islands is prosperous. Far from it. In the
days of slave-grown sugar these, like the other sugar
islands of the West Indies, were veritable gold mines
for their owners, but for two generations they have un-
dergone almost continuous hard times and property
values are but a fraction of what they once were. The
local governments have been increasingly hard pressed
to make ends meet, foreign commerce has not been pros-
perous and public revenues have fallen.1 Neither island
has in recent years been self-supporting and the home
countiy has been forced to the unwelcome expedient of
subsidy to enable the governments to perform their work
effectively. Meanwhile, scandals in the management of
public affairs have contributed to make the islands play
an unwelcome role in French public opinion.

French Guiana, covering 31,000 square miles on the
mainland, is much less important commercially than are
the islands. Since the abolition of slavery, in 1848, it
has steadily declined and now tends to become merely a
convict colony. Sugar production, formerly important,
has practically disappeared. Only a few ruins mark

1 The foreign commerce of Martinique fell from 67,366,401
francs in 1882 to 34,937,260 in 1907. In 1912, it had risen to
50,222,225. That of Guadeloupe fell from 68,478,843, in 1882,
to 29,850,001, in 1907; in 1912, it was 44,012,125 (Stephen Bonsai,
The American Mediterranean, quoting statistics of the French Co-
lonial Office for the years 1882 and 1907. The figures for 1912
are calculated from Daily Consular and Trade Reports, Sept. 27?
1913, quoting French customs returns).

72 CARIBBEAN INTERESTS

the sites of former prosperous estates. Free white col-
onists will not go to the colony and the French Govern-
ment has persisted in using it as a place to which con-
victs, especially political offenders, are to be trans-
ported. On March 5, 1911, the population of the set-
tled fringe along the coast is reported as 49,009, of which
26,325 is urban. The convict colony numbers 6,465.
There are in the back country some 12,000 men in the
gold camps who produce practically all the exports. The
export and import trade, except with the home country,
is negligible. The annual drain on the home treasury
reaches about $1,250,000, of which all but about $100,-
000 is due to the penal establishment.1

THE DUTCH COLONIES2

For the Netherlands, as for France, the West Indian
colonies are the last visible remains of far-reaching co-
lonial ambitions in America. Not only in the favored
region, which has since become New York, did the Dutch
once aspire to become large colonial proprietors. In
1636, they set out to conquer Brazil and by 1640 found
themselves firmly established in Recife and what were

1 See a protest against the continuation of the transportation
system made by M. Boucon, in 1910, cited in James Rodway, Gui-
ana, London, 1912, p. 149- See also pp. 152 and 171.

2 One small island, St. Martin, between Anguilla and St. Bar-
tholomew, is partly owned by France, partly by the Netherlands.
A number of other islets must be mentioned if the list of Euro-
pean property in the West Indies is to be complete. Among them
are St. Bartholomew, belonging to France, and Saba and St. Eusta-
tius, belonging to the Netherlands. At the latter, tradition has it,
the flag of the United States received its first international salute.

MINOR CARIBBEAN COLONIES 73

then considered the six best provinces of Brazil. The
colony prospered, but in 1654, hard pressed in war by
the English, the Dutch were forced to surrender all their
possessions in the region. Only a few moss-grown
forts, such as that which is still pointed out to tourists
at Bahia, remain to bear witness to the Dutch colonial
ambitions in what has become the largest of South
American republics. During their brief stay of a quar-
ter of a century they had made Brazilian sugar and rum
familiar in European markets, but on industry, agricul-
ture, morals and religion they left no impress.

Of greater importance and more permanent results
were the Dutch colonial efforts north of the Amazon in
the region now known as Guiana. As early as 1656
they established their control in Cayenne, but lost the
colony to the French in 1664, the same year England
wrested from them their colony of New Amsterdam.
Three years later they made good this loss by seizing
the English colony of Surinam which, after many buf-
fetings of fortune, still remains in their hands.

In foreign trade, Dutch Guiana compares only pass-
ably with regions similarly situated. It was formerly
the most prosperous of the Guianas, but has now fallen
far behind the British colony. The foreign trade is ap-
proximately half that of British Guiana and consider-
ably less than half that of Costa Rica.1 The chief ex-
ports in the order of importance are balata, sugar, gold
and cocoa. Rice is not reported among the exports,

1 Commercial Relations of the United States, 191 1, Bureau of
Foreign and Domestic Commerce, Washington, 1913, p. 109 et seq.,
gives the value of the foreign trade in 1911 as $6,990,101.

74 CARIBBEAN INTERESTS

and bananas are still an unimportant factor in the for-
eign trade, though the country is eminently fitted to pro-
duce both. Sugar production has declined; it was for-
merly the mainstay of the colony, but only five planta-
tions are reported as being worked in 1912.1 Sugar,
alone, in British Guiana is now practically equal in
value to the entire import and export trade of the Dutch
colony. Like the French colony, Dutch Guiana is a
drain on the home treasury, the deficit amounting to
about a million guilders annually."

The only other Dutch possession in America is the
colony of Curacao and its dependencies, Aruba and
Bonaire. Especially since the abolition of slave labor,
they have suffered from all the adversities which have
at various times affected the West Indian region and,
barring unforeseen developments, their resources are
so meager and they lie so much to the side of the main
routes of trade that their future holds only modest
promise.

So far as they depend upon natural resources, the
islands are poor indeed.3 Lying off the Venezuelan
coast, they struggle against an oppressive climate.
Their principal commercial interest, the transshipment
of goods destined to Venezuela, is dependent upon pub-
lic order in that much disturbed republic and upon its
friendliness, which has been conspicuous in recent years
by its absence. Small in size — no point is more than

1 Rodway, James, Guiana, London, 1912, p. 171.

2 Rodway, James, op. cit., p. 47.

3 Commerce Reports, Supplement, April 29, 1915. The colony
of Curacao includes also Saba and St. Eustatius.

MINOR CARIBBEAN COLONIES 75

four miles from the sea — the best soil is gradually being
blown away by the trade winds or washed into the sea
by heavy rains.

In 1914, the sea was discolored six miles from the
coast by the flooding off of the most valuable portion
of the islands' surface. Though their fertility is dimin-
ishing, fertilizers — guano and phosphate — are exported.
A crop in four years is about the average, and cornmeal,
the principal food of the common people, has to be pur-
chased in the United States.1 Even under these adverse
circumstances, however, the little group of islands makes
a very creditable showing compared to the mainland
colony.2 First among the exports are straw hats,
constituting one-third of the total. On the making of
these hats, indeed, a large proportion of the people de-
pend for their livelihood.

The government is making strenuous efforts to re-
store the prosperity of the colony, especially by the in-
troduction of sisal culture, but the task is a hard one.
Local industry contributes little. The salt industry —
Curacao salt like that from Turks Islands once com-
manded the top of the market — has suffered an almost
complete collapse. It needs no argument to prove that
there is no great future for a colony which is without
position of great advantage and whose chief products,
besides the hats, fertilizers and salt already mentioned,
are goatskins, divi-divi and aloes.

The Dutch policy toward the West Indian colonies is

1 Daily Consular and Trade Reports, April 20, 1914.

2 Commerce Reports, Supplement, July 1, 1915. The foreign
trade in 1913 reached a total of $2,830,575.

76 CARIBBEAN INTERESTS

not one which attempts to confine colonial trade to na-
tional limits. This has brought by far the larger por-
tion of the foreign trade to American ports and princi-
pally to the United States. In Dutch Guiana,1 more
than one-fourth of the imports come from the United
States, including practically all of the breadstuffs, fish,
meats, and petroleum, and more than one-third of the
" exports were sent there. The latter included one-fifth
of the balata, the chief export, one-half of the sugar,
the second in importance, and practically all of the
cocoa and coffee sent abroad. From the Curacao group
we take over half of the exports, the main item being
straw hats, and we send there over half of the imports,
including practically the entire shipment of foodstuffs,
meats, petroleum and coal.2

THE DANISH COLONIES

The Danish West Indies are an accident. That this
country, long unmilitary, with only a minor share in the
commerce of the region, should keep what has been
called the "Gibraltar of the West Indies," finely located
as to the chief trade routes, is one of the seeming con-
tradictions of history.

The size and character of the Danish islands make
them of negligible value for their own products, but
their position has made them more than once highly de-
sired, especially by the United States. Negotiations
have twice been close to an end, by which their control

1 Commerce Reports, Supplement, April 29, 1915, for import
trade, and Commercial Relations, 1911, Washington, 1913.

2 Commerce Reports, Supplement, July 1, 1915.

MINOR CARIBBEAN COLONIES 77

would have been transferred to that Government when
unexpected complications prevented. The desire to pos-
sess them will doubtless increase as the meaning of the
Panama Canal and the importance of its defense come
to be realized by the United States. That any of the
West Indies will again become places from which block-
ade-runners may operate to enter its ports, closed to
commerce by its own fleet, is fortunately no longer con-
ceivable. But quite aside from military operations
proper, the control of so central a port by a distant
power, which maintains hardly more than a nominal
government, is undesirable. The increasing police du-
ties in the Caribbean region, which the United States
has assumed since the beginning of the twentieth cen-
tury, give it an unusual interest in any port which may
be used as a station for the fitting out of filibustering
expeditions against the neighboring none too stable re-
publics. This character has too often been that of the
Danish islands. From a military and naval point of
view they are valuable because of the possibility of for-
tifying the harbor of St. Thomas and because that land-
locked port can, by dredging, it is said, be made by far
the best anchorage for ships in the eastern West Indies.
For the same reason, its possession is important for
the facilities afforded peaceful commerce, though in re-
cent j^ears, the harbor being unimproved, the large
ocean liners have touched at the port infrequently. A
German line is a partial exception ; indeed, as has often
been facetiously remarked, the islands are largely a pos-
session, not of Denmark, but of the Hamburg- American
Steamship Company.

78 CARIBBEAN INTERESTS

The local trade is, of course, insignificant. The pop-
ulation is predominantly black. Their wants are few
and the state of cultivation of the land is low. St.
Thomas is not agricultural. Its shallow soil and
droughts make cultivation impractical. There are a few
gardens in the island but the only product of commer-
cial importance is bay rum, of which the three islands
together sell about $90,000 worth annually. The neigh-
boring St. John is now practically deserted to the blacks,
and its intercourse with the outside world is negligible.
Some bay oil is harvested and an effort is being made
to introduce the cultivation of lime trees with the hope
that the experience in the British Dominica may be re-
peated.

St. Croix, the largest and in natural resources the
richest of the islands, has an area of some seventy-four
square miles. It has a larger white population and is
practically monopolized by the sugar industry.1

No records of exports are kept by the halting colonial
government. Imports enter through the port of St.
Thomas, and nearly two-thirds come from the United
States. Practically the entire American trade is in
coal, used to supply steamships, and foodstuffs. Great
Britain takes second place in the foreign commerce.
The trade with the home country is insignificant. The
generally unprosperous commercial condition of the
Danish Antilles is reflected also in the statistics of pop-

1 Good discussions of the trade of the Danish West Indies are
found in Daily Consular and Trade Reports, Feb. 13, 1912; March
11, 1914. Also in Commerce Reports, Supplement, October 29,
1915.

MINOR CARIBBEAN COLONIES 79

ulation. In 1835, over 43,000 people made their homes
in the islands, but the number steadily fell to 31,000 in
1901, the year of the last census, and in 1915 was re-
ported as 28,000. The colony is, however, said to be at
present financially self-sustaining.

Taken as a whole, the minor colonial possessions in
the Caribbean are a liability to their owners, not an
asset. They are kept more for sentimental reasons than
because of their present or prospective value. Their
dependence upon the United States for a market for
their products is conclusively shown by their trade re-
turns, except where, as in the case of the French colo-
nies, tariff arrangements deflect the normal course of
trade. For their imports they rely even more on the
northern republic. So decidedly is this the case that
even the French tariff policy is modified so as to allow
American goods to enter to keep down the cost of living.

Without low tariffs on American imports and fa-
vorable tariffs in America on their exported products,
the condition of these islands would become deplorable
indeed. Probably in none of the political units of the
West Indies does the prosperity of the people depend
so much on the good will of the American Congress.1

1 See article by Gaston Sarlat, formerly deputy from Guade-
loupe, advocating closer commercial relations with the United
States and complaining against the disappointing efforts which
have been made since 1870 to improve the condition of the French
West Indies, quoted in Daily Consular and Trade Reports, Dec. 6,
1913.

CHAPTER VI

CUBA AND ITS RELATIONS TO THE UNITED STATES

I. POLITICAL

Preeminent among the islands of the Caribbean is
Cuba. The most prized of the Spanish possessions after
the revolt of the colonies in South and Central America,
it became an independent republic as a result of the
treaty of peace of December 10, 1898, at the end of the
Spanish- American War. Since then, in spite of local
disturbances, it has risen to a position relatively much
more important in the Caribbean than it ever held under
the Spanish regime. The advance which has come is due
not only to the natural resources of the country, but
also to the peculiar political arrangements entered into
only half willingly by the local government.

During the negotiation of the treaty of peace, Spain
had expressed her fear that left to itself the island might
become Africanized. The examples of the Dominican
Republic and Haiti aroused fears that Cuba indepen-
dent might be a prey to frequent revolutions with the
result that neither property nor personal rights would
be protected. To save the island from the consequences
of a "premature" independence, Spain wished to have
the United States keep at least a degree of control suffi-
cient to insure order. No express engagement on this

80

CUBA AND THE UNITED STATES 81

point appears in the treaty. The property rights of
residents of Cuba, it was declared, would not be im-
paired and the United States, so long as its occupation
lasted, undertook "to. assume and discharge the obliga-
tions that may, under international law, result from the
fact of its occupation for the protection of life and
property."

The subsequent action of the United States showed,
however, that there was no intent on its part to allow
international complications to arise through a disturb-
ance of local order in the island. While the provisional
government created by the United States was still in
control, a convention met on November 5, 1900, to draft
a constitution for the new republic. It was adopted
on February 21, 1901. It included no recognition of
supervisory powers of the United States.

In this situation Congress felt called upon to act. A
provision was inserted in the Army Appropriation bill
of March 2, 1901, which has since become known as the
Piatt Amendment, the terms of which outlined the
conditions under which Congress authorized the Presi-
dent to withdraw the American troops and "leave the
government and control of the island to its people."
Cuba was to adopt a constitution, one clause of which
should bind the nation to conclude with the United
States a treaty including the following agreements
that,

1. No treaty was to be made which would impair the
island's independence, nor was any portion of the island
to be allowed to pass under the control of a foreign
power.

82 CARIBBEAN INTERESTS

2. No debt should be contracted or assumed beyond
the ability of the island to pay.

3. The United States was to have the right to inter-
vene to protect Cuban independence, to maintain a gov-
ernment which would protect life, liberty, and property
and carry out the obligations undertaken by the United
States in its treaty with Spain.

Other engagements referred to ratification of acts
taken by the United States during temporary occupa-
tion, the sanitation of the island, the status of the Isle
of Pines and the cession of land for coaling or naval
stations.1 On June 12, 1901, Cuba accepted this modi-
fication of her international position by embodying the
resolution of Congress in Article 3 of the constitution
and the agreement was further solemnized by being in-
corporated in a convention between the United States
and Cuba proclaimed July 2, 1904.

The right to intervene to preserve order has not
proven to be unnecessary. The first President, Thomas
Estrada Palma, was chosen at an election held Decem-
ber 31, 1901, and inaugurated May 20, 1902. For the
first three years of his term he favored no one of the
three parties struggling for control. Patronage was
distributed ratably among them and though there was
constant complaint of executive interference, public or-
der was kept. At the elections of 1905, however, wide-
spread corruption occurred and a revolution was soon
under way. Palma was unable to cope with the upris-
ing and appealed to the United States to intervene un-
der the addendum to the constitution above mentioned.

1 U. S. Statutes at Large, XXXI, 897-8.

CUBA AND THE UNITED STATES 83

President Roosevelt sent William H. Taft, then Sec-
retary of War, and Robert Bacon, the Assistant Sec-
retary of State, to Cuba to restore order. On their
arrival, Palma resigned. The Congress dissolved with-
out filling the office and President Roosevelt thereupon
appointed Mr. Taft provisional governor.

The American control, thus reestablished, lasted until
1908, when a new election having been held, resulting
in the choice of Jose Miguel Gomez as President, the
United States again withdrew. There followed a period
of comparative quiet, the first serious interruption of
which came in a revolution in 1912, headed by General
Evaristo Estenoz, the leader of the negro party. For
a time a third occupation by the United States appeared
imminent, and a fleet of eight cruisers was sent to Key
West to be ready for emergencies. The local govern-
ment finally succeeded, however, in overcoming the in-
surrectos and in the election of November first of that
year, Mario Menocal, the candidate of the conservatives,
was chosen President. For the first time Cuba had
succeeded in peacefully transferring control of the presi-
dency from one party to the other.

Whether the Cuban people possess or can develop
the degree of self-control necessary for self-government
is still, in view of recent history, an open question. Ex-
travagance in expenditure and willingness to consider
the holding of public office as an opportunity for taking
selfish advantages, rather than as a call to service, have
been far too prominent characteristics of Cuban poli-
tics. Disputes over the patronage have been incessant;
the public debt has risen constantly. Starting prac-

84 CARIBBEAN INTERESTS

ticaEy debt free, the public obligations reached $62,-
083,100, in 1911, before the end of a decade of local
control. In 1914, the total was $67,620,000. This
does not represent a burdensome debt. With the rap-
idly increasing economic strength of the island it can
be easily borne. But the purposes for which the debt
was created are significant. Judged by the actual re-
turn to the people, which was made possible by the loans,
there appears to be still considerable doubt whether
Cuba will be able to prove herself beyond the need of
guidance by stronger powers in financial affairs.

Even considered apart from the general Caribbean
situation, Cuba is important to the United States, not
only because of this responsibility assumed to assure
public order in the island. There are with the "Pearl
of the Antilles," in addition, important military and
commercial connections.

The operations of the Spanish- American War had
again demonstrated what long had been evident to
those at all familiar with our naval affairs — the desir-
ability of acquiring for the United States at least one
naval base in the West Indies. Former negotiations,
especially with Denmark and the Dominican Republic,
had for various reasons been fruitless. One of the
clauses of the Piatt Amendment had provided,

"That to enable the United States to maintain the
independence of Cuba and to protect the people thereof
as well as for its own defense, the government of Cuba
will sell or lease to the United States lands necessary
for coaling or naval stations at certain specified points,
to be agreed upon with the President of the United

CUBA AND THE UNITED STATES 85

States." An agreement to carry out this engagement
was signed by the President of Cuba February 16, 1903,
and by the President of the United States on February
23 of the same year. By its terms harbors and lands
adjacent were given over to the United States for a
coaling and naval station, in Guantanamo in eastern
Cuba and at Bahia Honda in northwestern Cuba.1 The
ultimate sovereignty of Cuba continues. By a later
agreement, the United States undertakes to pay an an-
nual rental of $2,000 so long as the areas are occupied
by its forces.2 The rights of the United States in Bahia
Honda were surrendered in 1912 and the area under its
control in Guantanamo was increased. These settle-
ments are of great importance in that, now in possession
of Porto Rico and with a strong naval base in Cuba,
the United States is in an exceptionally advantageous
position to carry out the obligations it has assumed for
the preservation of order in the Caribbean, and occupies
a commanding position on the trade routes which pass
to the Panama Canal.

II. COMMERCIAL

Both in the United States and Cuba there has de-
veloped a desire to bind the two countries closely to-
gether in their trade relations. Commercially, the
island is naturally dependent upon its northern neigh-
bor. That its products did not seek our ports in much

1 Malloy, W. M. Treaties, Conventions, International Acts, Pro-
tocols and Agreements between the United States and Other Pow-
ers, Vol. I, p. 358.

2 Ibid., p. 360.

86 CARIBBEAN INTERESTS

greater quantities even before the island secured its in-
dependence was due only to the tariff policy of Spain.
The investments of our citizens in Cuba and the com-
merce which had been built up with the island in the
later years of Spanish control were influences which
increased American interest in the island's struggle for
independence. In 1903, a treaty was negotiated with
the island government which bound it even more closely
to the United States than would have been the case be-
cause of its location and the character of its products.
The agreement provides for mutual concessions in tariff
rates. There is a free list for both countries ; all Cuban
products not on the free list are to be admitted at a
reduction of 20 per cent, from the American tariff rates
and articles from the United States enter Cuba at re-
ductions varying from twenty to forty per cent.

In size, population, amount of foreign capital in-
vested, foreign trade, and in possibilities for future de-
velopment Cuba outranks all other communities or
islands in the Caribbean region. Its area, 43,000 square
miles, and its population, 2,474,000, are about equal to
those of Tennessee. To compare it to Caribbean units,
its population is about equal to that of Haiti and the
Dominican Republic together and about twice that of
Porto Rico. The average density of population is less
than sixty per square mile. There is, therefore, ample
room for further growth. Like Porto Rico, but unlike
other Caribbean divisions, the population is largely of
white blood. The census of 1907 reported 1,428,176,
or 69.7 per cent., of the population as white, while the
negroes number 274,272, mixed 334,695, and Chinese

CUBA AND THE UNITED STATES 87

11,837. Among the whites there were 203,637 foreign
bom, of whom 185,393 were Spanish and 6,713 from
the United States. From such a community much may
be expected. Though the climate may limit the sort
of labor that may be secured, this is not like Jamaica
or Haiti, a black man's country. The racial composi-
tion of the population as between white and black com-
pares favorably with that of some of the southern com-
monwealths of the United States. The proportion of
non-white blood is about the same as in North Carolina
and much less than in Alabama, Florida, Georgia,
Louisiana or Mississippi. The white element in Cuba
and in the southern United States is itself, of course, of
radically different stock, but the performance of the
Cuban people in the last decade and a half shows char-
acteristics which, so far as economic advance is con-
cerned, are decidedly encouraging. There is no more
heartening evidence of what the Spanish-American can
do in a semitropical climate than that offered by Cuba.
It is when we turn to the figures of recent trade de-
velopment that the importance of Cuba is impressed
upon us most vividly. In 1896, the year after the in-
surrection against the mother country broke out, our
exchanges already reached a value of over forty-seven
and a half million dollars. In 1898, the year of the
war, they fell to less than twenty-five million. There-
after, both imports and exports grew steadily; in 1901,
they totaled over $69,000,000. After the commercial
treaty of 1903 an even greater portion of the foreign
trade sought and came from United States ports. It
was valued at over $120,000,000 in 1908, and at over

88 CARIBBEAN INTERESTS

$182,000,000 in spite of local disturbances in 1912. In
1914, it reached $200,188,222.

How important the island has become as an element
in the trade of the United States is shown in the follow-
ing table.

Imports into the United States
For the Year Ending June 30, 19141

United Kingdom $248,089,913

Germany 189,919,136

Canada 160,689,709

France 144,446,252

Cuba 131,303,794

Exports from the United States
For the Year Ending June 30, 1914

United Kingdom $548,641,399

Germany 344,794,276

Canada 344,716,981

France 159,818,924

The Netherlands 112,215,673

Cuba 68,884,428

1 Compiled from Statistical Abstract of the United States, 1914, Washington, 1915.

Cuba thus ranked fifth among all countries from
which the United States imported goods and took sixth
place among her customers. Cuban trade with the
United States amounted to twice that with Belgium, to
almost four times that with Spain or with Russia in
Europe, to almost eight times that with Sweden. Com-
pared to other Caribbean regions this trade total makes
the importance of Cuba even more striking. Cuba's
trade with the United States is about seven times as
great as that of the Central American states and thir-
teen times as great as that of Haiti and the Dominican
Republic, in spite of the dominant position the country-
holds in the markets of these regions.

The greatest increase in the economic importance of
Cuba has come recently. Only Mexico has shown a
comparable advance. The chief causes of the change
have been the establishment of greater security for prop-
erty following the Spanish-American War and the re-
sulting increase in the investments of foreign capital.

CUBA AND THE UNITED STATES 89

After the war, conditions changed rapidly; imports
grew, especially under the demand which the new possi-
bilities of development brought for the extension of
industry. Exports rose through the reestablishment
and enlargement of the sugar and tobacco plantations.

Like other countries of the West Indies, Cuba is
almost exclusively dependent upon the products of her
soil. Her chief exports, sugar and tobacco products,
are, it is true, sent abroad, in great part, in at least a
partially manufactured condition. Still it is true of
Cuba, as of the other islands, that there is no diversified
industry as a basis of the export trade. The govern-
ment rests on an economic organization which involves
for the average workman only a low degree of expert-
ness and the proportion of value produced by skilled
labor is relatively small.

In sugar production Cuba is fortunate in that cane
can be grown over wide areas. All the provinces are
important producers. As late as 1909 the most im-
portant sugar provinces were Santa Clara and Matan-
zas in the west central portion of the island, but recent
developments have shown the greatest increases in the
extreme eastern province of Oriente, which promises to
become as famous as a sugar-producing district as Pinar
del Rio and Habana at the western end are for their
tobacco.

Foreign capital for investment in the sugar industry
has come to the province in large amounts in recent
years, especially from the United States. The acreage
has been rapidly extended, irrigation and improved
methods of culture have been introduced. As a result,

90 CARIBBEAN INTERESTS

the yield increased almost a hundred per cent, in the
five years preceding 1913. Ten years before the prov-
ince produced only one-tenth of the sugar of the island,
but in 1911-12 it produced 29 per cent, of the sugar and
over 25 per cent, of the molasses.1

The increase of sugar production in the entire island
was especially marked after the commercial treaty of
1903 with the United States. An American consular
representative in a report for June 10, 1912, declared
that since the passage of the reciprocity treaty "Cuba
has entered upon a period of development that has ex-
ceeded the predictions of the most optimistic. ... So
great has been this recent development that it can safely
be said that if the present activity continues Cuba will
be in a fair way of becoming the largest producer of
sugar in the world." 2 Another influence which in-
creased the investment in the sugar industry was the
abolition of the practice of granting export bounties for
the production of sugar in European countries, a result
following the Brussels Convention of 1903.3 As a re-
sult of these influences about seven out of every eight
pounds of sugar produced, and about fourteen out of
every fifteen pounds exported from Cuba now go to
the United States.4

1 Daily Consular and Trade Reports, October 16, 1913.

2 Consular Reports, Special Agents Series, Department of Com-
merce and Labor, 6l, p. 16, 1912. Cuba as a Buyer and Seller, by
A. G. Robinson.

3 See, for a discussion of the production of beet and cane sugar,
T. G. Palmer, Sugar at a Glance, Senate Doc. 890, 62nd Cong. 2d
Sess. Washington, 1912.

4 Commerce Reports, September 29, 1 9 1 ^ • The total crude

CUBA AND THE UNITED STATES 91

Up to the passage of the Underwood- Simmons
Tariff, by which sugar is to be transferred to the free
list, Cuba had an advantage over other foreign coun-
tries in that under the commercial convention with
the United States her sugar enjoyed a twenty per cent,
reduction from our regular tariff rates. On the other
hand, her sugar growers were not then in as advanta-
geous a position as the producers of domestic cane and
beet sugar, nor did they compete on equal terms with
the growers of cane sugar in Hawaii, Porto Rico and
the Philippines. These other groups together pro-
duced approximately half of the sugar consumed in the
United States. Whether the advantage of treatment
equal to that of our own sugar growers will overcome
the disadvantage of the abolition of preference over
other foreign nations is yet to be demonstrated.

In the popular mind Cuba is connected with tobacco
production rather than sugar. Though recent develop-
ments have shown that the future prosperity of the
island will probably be dependent on the latter, to-
bacco still holds among the exports a position only sec-
ond in importance. The high quality of the better
grades of Cuban leaf seems to assure that it will remain
the standard of comparison. But just as the cane
sugar industry has had to compete with a rapidly rising
output of beet sugar, so Cuban tobacco finds its market
disputed by a widespread development of tobacco cul-
ture in other parts of the world.

The Cuban tobacco industry is prosperous, but corn-
sugar exportation of Cuba in 1913-14 was 2,597,732 long tons, of
which 2,4.54,334 tons were exported.

92 CARIBBEAN INTERESTS

pared to sugar growing it has enjoyed only a moderate
increase. The product holds its market rather by vir-
tue of superior quality than on account of its low cost
of production.

In 1899, Cuban tobacco was exported to the value of
$21,000,000. This was at a period when its cultivation
had not yet fully recovered from the disastrous effects
of the revolution and the Spanish- American War, but
the value of the crop compared favorably with its value
under Spain. When the reciprocity agreement of 1903
with the United States went into effect the tobacco
growers felt its influence less than the cane-sugar pro-
ducers. They increased the area under cultivation
where that was possible and strove to raise the standard
of their tobaccos. It was in this period that shade-
grown tobaccos began to take an important place in
the market. The value of the tobacco crop rose until
the political disturbances of 1906-7, when the upsetting
of the economic conditions in the island brought a drop
in a single year from $31,286,000 to $20,931,000. With
the reestablishment of order came another revival which
continued until the outbreak of the European War.1
Between one-half and two-thirds of the tobacco exports
in normal years go to the United States.

The products exported from Cuba, other than sugar
and tobacco, are, compared to these items, unimportant.

The fruit trade, still in its infancy, shows promise of

i

1 Commerce Reports, September 27, 1915. The exports of to-
bacco products for the year ending June 30, 1914, reached a value
of $32,166,192. In the next year, due to the effects of the Euro-
pean War, it fell to $21,976,650.

CUBA AND THE UNITED STATES 93

healthy development. Bananas for home consumption
are grown over the entire island, but are exported only
from the north coast at the extreme eastern end where
soil and climate are especially favorable.1 Coconuts
are exported from the same district. The citrus-fruit
industry is increasing in importance, but grapefruit is
the only product of this sort which has as yet become im-
portant in foreign trade. Coffee plantations, formerly
prosperous, were destroyed in the revolt of 1868-78 and
•attempts of the government to rehabilitate the industry
has e thus far resulted only in production for local use.
Large quantities are still imported, especially from
Porto Rico. Cacao production is increasing but is not
yet large in amount. Mineral and forest products,
though entering into foreign commerce in greater ac-
tual amount than in many of the other West Indies, are
of minor importance compared to the great staples men-
tioned.

A more striking illustration of dependence upon a
few crops, when the importance of the island and the
number of its population are considered, can hardly be
found in the entire Caribbean. On the average over
ninety per cent, of Cuban export trade is in sugar and
tobacco, the former making up over two-thirds of the
total value of goods sent abroad. It is no wonder sugar
controls both domestic and foreign policy in Cuba. It
has become the basis of the greatest economic interest
in the country and, in great part, upon the progress of
sugar manufacture depends prosperity.

1 Daily Consular and Trade Reports, October 16, 1913, contains
a good discussion of recent sugar and fruit developments.

94 CARIBBEAN INTERESTS

Both absolutely and relatively the importance of
sugar in Cuba has increased remarkably in recent years.
While some of the West Indian colonies have found their
sugar estates declining or, at most, enjoying but a mod-
erate prosperity, foreign capital has been rushing into
sugar production in Cuba at an unprecedented rate. A
large number of factors have contributed to this develop-
ment. Peace, coming after the protracted revolt
against Spain, and the Spanish-American War, of it-
self, encouraged investment to supply the rapidly in-
creasing world demand. The stability in the world
market for sugar, restored by the Brussels convention,
made sugar-raising an industry in which conservative
investment was again possible. More important than
these were probably the political arrangements made by
the republic which placed it in a peculiar position in re-
lation to the United States. The Piatt Amendment
assured capital that the disturbance of business, so fre-
quent before because of local unrest, would be reduced
to a minimum. Not least in importance was the com-
mercial treaty of 1903 with the United States. The
island's natural market, from the geographical view-
point, was thus by political arrangements opened to her
on conditions which accentuated the advantage enjoyed
by position. These conditions have brought marked
changes in the relative importance of Cuban industries.

In 1899, the first year after Spanish control had been
eliminated, the chief exported products, as in the period
preceding, were tobacco and sugar. The former was
shipped abroad to the value of $21,000,000 and consti-
tuted 42 per cent, of the total; of the latter $18,000,000

CUBA AND THE UNITED STATES 95

worth were exported, making 38 per cent, of the total.
The following years brought a reversal of these condi-
tions. Tobacco fell in relative importance. The de-
gree to which it has now come to occupy an inferior
position and the degree to which, in general, the life of
the island depends upon its agricultural industries is
indicated by the following table.

Percentages of Certain

Products in Cuban Export Trade-

-1910-14 l

1910

1911

1912

1913

1914

Sugar and products

Tobacco products

73.21

18.52

2.90

1.70

1.13

1.34

.26

.94

64.00
25.95
3.01
2.14
1.74
1.56
.25
1.35

71.58
20.43
2.64
1.62
1.34
1.19
.20
1.00

71.65
19.20
3.11
1.95
1.20
1.57
.23
1.09

77.00
16.00

2.50

Fruits and vegetables

Forest products

Animal products

2.60

.10

1.68

Marine products

.02

Miscellaneous

.10

100

100

100

100

100

1 Table compiled from Daily Consular and Trade Reports, May 3, 1913, and
Aug. 6, 1913, figures for 1910, 1911 and 1912; and from Commerce Reports, Supple-
ment, May 10, 1915, for 1913 and 1914.

Like other West Indian islands, though Cuba's chief
products are foodstuffs, she imports a comparatively
large part of the products which are relied upon to
sustain human life. Her dependence upon a few staple
exports is no more remarkable than that upon imports
to feed and clothe her people. About two-fifths of her
imports are foodstuffs, and one-seventh textiles and
manufactures from them. The industrial developments
going on in the island raise the proportion of machinery,
metal manufactures and chemicals far above the aver-
age for the Caribbean region. Still, the materials im-
ported are usually in a form ready for consumption and

96 CARIBBEAN INTERESTS

the Cuban home industries take no large amount of
goods for further manufacture. The standard of life
is comparatively low, and though the foreign trade has
in the last decade shown a remarkable growth, Cuba is
not even now a country with a widely expansible market.

Especially in Cuba's export trade the United States
holds a dominant position. Of the entire exports the
United States takes now about four-fifths.1 Our rela-
tion to Cuban export trade is thus summarized in a re-
cent report to the United States Government. "Aside
from Cuban cigars and tobacco, which the world de-
mands and obtains despite American necessities or the
market, and raw sugar, which England often buys in
view of European market conditions, practically all of
the exports go to the United States." 2

Of the import trade the United States furnishes be-
tween fifty and sixty per cent. What does not come
from the United States has been characterized as "busi-
ness not obtainable on account of natural conditions." 3

Evidently, the United States occupies a position in
Cuban trade which makes the commercial relations with
the great republic most important of all Cuban foreign
interests. In exports it controls more than four times
the amount taken by all the rest of the world combined,

1 Commerce Reports, Supplement, May 10, 1915, shows that the
United States took 80 per cent, of the exports in 1913 and 83.14
per cent, in 1914. In the latter year the declared value of ex-
ports to the United States was $148,263,623, of which sugar and
its products accounted for $117,828,568, tobacco and tobacco prod-
ucts for $17,514,085.

2 Commerce Reports, Supplement, May 10, 1915.

3 Daily Consular and Trade Reports, May 3, 1913.

CUBA AND THE UNITED STATES 97

the other countries in the order of importance being the
United Kingdom, Germany, and France. In imports
its position is not so commanding, but it sends to Cuba
goods of greater value than all the rest of the world to-
gether, the other countries of rank being the United
Kingdom, Spain, Germany and France.

CHAPTER VII

THE REGENERATION OF PORTO RICO

None of the developments in the Caribbean in the
last decade is more striking than the changes which
have occurred in Porto Rico. None of the political
experiments of the United States has proved more suc-
cessful. To be sure, the conditions which confronted
us on assuming control were exceptional in the West
Indies, and in reviewing what has been done, we must
not lose sight of the fact that the opportunity was quite
as unique as has been the use made of it. Most im-
portant among favorable conditions was the large per-
centage of people of white blood among the population.
The census, taken under the direction of the Secretary
of War in 1899, showed that of the total of 953,243
persons in the islands, 589,426, or approximately two-
thirds, were listed as white ; 304,352 were mestizos, 59,-
390 were negroes, and 75 Chinese. This was evidently
a population from which much more could be expected
than would have been the case had the colored races pre-
dominated. A comparison with Jamaica suggests itself.
In area, Jamaica, with 4,200 square miles, compares
favorably with Porto Rico, with 3,606 square miles. The
population of the former in 1911 was 831,383, of the
latter in 1910 was 1,118,012. But the racial composi-
tion of the two islands shows a strong contrast. In

98

THE REGENERATION OF PORTO RICO 99

Porto Rico, about two-thirds are white, one-fifteenth
negroes, and the rest mestizos. In Jamaica, one fifty-
third are white, about three-fourths are negroes and
nearly one-fourth are "colored," East Indians, or Chi-
nese. In other words, in Porto Rico there are two people
of white skins to one of colored or black; in Jamaica,
there is one white man to every fifty-two colored or black.

Another advantage of Porto Rico is the high average
fertility of the island which enables the maintenance of
a dense population on what, for the Caribbean, is a
comparatively high standard of life. Americans find it
hard to believe that Porto Rico, with 325.5 persons to
the square mile, is, with the exception of Rhode Island,
Massachusetts, and New Jersey, the most thickly popu-
lated of all our states and territories. Unlike these
states, the high population per square mile is not ex-
plained by the presence of large cities, for while the
people of Rhode Island, for example, are 96.7 per cent,
urban, that is, dwellers in cities of 2,500 inhabitants or
more, the people of Porto Rico are 79.9 per cent, rural.

But, even with these advantages, what Porto Rico
has done is exceptional. The commercial performance
of these people in their narrow quarters in the last fif-
teen years should make us revise our current ideas as to
the possible productiveness of tropical colonies. The de-
velopment of Porto Rico was and still is agricultural,
in fact there seems to be small likelihood of the discovery
of any great mineral resources, and manufactures are
not important. Even the simple industries which do
exist, tobacco manufacture, hat making, fruit canning
and linen embroidery, are dependent, with the exception

100 CARIBBEAN INTERESTS

of the last, on agriculture. The island, like the rest of
the West Indies, is destined for years to come to be
dependent for its manufactured products upon other
countries and must pay for them in agricultural prod-
ucts, chiefly sugar, tobacco, coffee and fruit.

To the general rule that the West Indian communi-
ties produce few, but distinctive crops, Porto Rico is
no exception. During the Spanish regime it was a
coffee island. But the days when Porto Rico's chief
product was coffee have passed, probably never to re-
turn. The new American regime has meant favorable
tariff rates to the United States, the abolition of repres-
sive taxation, the establishment of order and, most im-
portant, the willingness of capital to enter the country
to develop the resources. The old sugar estates with
their wasteful mills run by mule power or windmills and
their open evaporating pans are disappearing all over
the West Indies, and in Porto Rico the typical sugar
factory is now operated with steam machinery and the
sugar is produced by the vacuum-pan process. Sugar
has replaced coffee as the chief source of wealth. Under
the influence of the conditions created by American oc-
cupation the sugar exports of the island have risen re-
markably. Sugar exported in 1901 was worth $8,583,-
967; in 1912, $49,705,413. The average exportation
now is six times what it was in the ten j^ears preceding
annexation. Due to favorable tariff rates, practically
all of Porto Rican sugar has heretofore come to the
United States.1

1 Commerce Reports, May 25, 1915. In 1914, we took 641,-
755,000 pounds valued at $2 1,000,000. "

THE REGENERATION OF PORTO RICO 101

The second place among Porto Rican products is now
taken by tobacco. This crop has also increased remark-
ably during American occupation. Exports of cigars
and cheroots are nineteen times as great as in 1901.
Leaf and scrap tobaccos are exported now to a value
over eight times that reached fifteen years ago. There
has been a great growth also in the manufacture of cig-
arettes, but all but a negligible amount are consumed
locally.

The improvement has been not only in quantity
but in quality. Shade-grown tobacco, grown un-
der immense stretches of cheese cloth, was practically
unknown till the introduction of scientific study of the
artificial means of modifying the strength of the leaf
and the flavor of the product. This came only with
American control. The value of tobacco exports as a
whole has through these means risen from about $700,-
000 in 1901 to about $9,000,000 in 1914. Of this
the United States now takes practically the total
amount.

The rise of the tobacco crop has now pushed coffee
back to third place among the island's products. In
this result the loss of the protected markets in Spain
and Cuba has had an influence since the tariff policy of
the United States has not yielded an equivalent ad-
vantage on this article. In addition, the increase in
Brazilian production has cut down the market of the
more expensive Porto Rican article even though the
grade of the latter is superior. There is, however, a
steady rise in the absolute amount of coffee produced,
and it now reaches more than 70 per cent, of the highest

102 CARIBBEAN INTERESTS

total ever attained under Spain.1 The United States
does not hold a position as a market for Porto Rican
coffee similar to that in sugar and tobacco. In fact,
it may be said that Porto Rico's exports to foreign coun-
tries are almost entirely coffee and that almost all the
coffee, until recently, has gone to foreign countries.2

A fourth group of island exports which is destined
to have an increasing importance in its economic life is
its fruit products, especially bananas, oranges, pineap-
ples and grapefruit. Like the tobacco and sugar, prac-
tically all of the fruit is exported to the United States.3

The new prosperity which came to our West Indian
colony is naturally reflected in the import as well as in
the export trade. Like other divisions in that region
of the world, the island is a non-manufacturing com-
munity. It sends its agricultural products abroad and
buys its manufactured goods and, to a large extent, its
food products. The total imports rose from $8,918,136
in 1901 to almost $43,000,000 in 1912. Later years
make a slightly less favorable showing. The chief ar-
ticles in the order of importance are cotton goods, rice,
iron and steel, and meat and dairy products. Prac-

1 Coffee production has risen less rapidly than sugar and to-
bacco but its value increased from $3,500,000 in 1906 to $7,000,000
in recent years.

2 In the year ending December 30, 1912, we imported only
$78,099 worth from the island. Since then the amount has shown
a tendency to rise. In 1914, we took a total value of $375,718.

8 In 1901 these reach a total export value of $109,801, while
in the calendar year of 1914 we took in the United States $3,298,-
823 worth, an increase in twelve years of about thirty-fold.
Fresh pineapples, alone, were imported in 1914 to the value of
$1,300,000, an increase of half a million dollars over 1912.

THE REGENERATION OF PORTO RICO 103

tically the entire trade in the first three groups and
seven-eighths of the last is absorbed by the United
States. In normal years 90 per cent, of Porto Rican
imports come from the United States.

This is a natural result of the favored tariff position
occupied by the new mother country, but the contrast in
total amount indicates also the tremendous influence the
new regime has brought to bear upon the standard of
life of the people of the island. There is "a decided
upward movement in the social life of the people. More
food and better food is wanted and is bought ; more and
better clothing is wanted and is bought; and there is
marked increase in the trade in so-called luxuries." *
A comparison of Porto Rico with other countries shows
its importance in our export trade, especially our export
of manufactures. We ship her more dyed and colored
cloths than to Asia, Africa, South America, and Eu-
rope combined. We ship her rice to an amount almost
three times as great as that shipped to all the rest of the
world. We ship her 50,000,000 pounds of pickled pork,
about one-third of our entire export.

The total trade of the island with other countries m
1914 averaged $65 per capita. Its amount was $79,-
509,549, of which $67,091,548 was with the United
States. In other words, our trade with Porto Rico
was two and a half times greater in value than that with
Switzerland, and half again as important as the

1 Robinson, A. G. Commerce and Industries of Alaska, Hawaii,
Porto Rico and the Philippine Islands, p. 74, Washington, 1913.
See also Report of the Governor of Porto Rico, 1913, and Statis-
tical Abstract of the United States, 1914, Washington, 1915, p. 487.

104 CARIBBEAN INTERESTS

trade with Austria-Hungary or with all of Africa.

Porto Rico and the United States have indeed come
to be part of an economic unit as well as a political one.
The United States took less than a sixth of the exports
in 1897 ; it now takes four-fifths ; it furnished a fifth of
the imports in 1897 and nine-tenths of the total at pres-
ent. So important had Porto Rican trade become to
the United States, in fact, that only eleven countries of
the world supplied more merchandise to the United
States in 1913. This growth has turned an adverse
balance of trade for the island in 1901 and 1902 into a
favorable one amounting recently to about $12,000,000.

Of course what has happened in Porto Rico is no con-
clusive indication of the changes which would occur if
the sovereignty of the United States were extended to
any other tropical community. Porto Rican resources
and Porto Rican population are exceptional. But for
all West Indian communities closer tariff relations with
the United States could hardly fail to have a favorable
influence on their development. This they all realize.
The recognition of the fact in the colonial communities
is elsewhere discussed. Political arrangements which
would identify their tariff interests with those of the
United States could hardly fail to bring improvement
in their economic condition.

For the independent nations of the Caribbean region
also closer relations with their northern neighbor would
work to their advantage, and this not only because of
the immediate advantage in trade. The remarkable
performance of Porto Rico is due quite as much to as-
surance of order, the security of life, liberty and prop-

THE REGENERATION OF PORTO RICO 105

erty, which American influence has brought, as to the
commercial preferences it enjoys. Public order is an
essential condition for economic development. With-
out it capital forsakes a community, the laboring man
cannot be sure of employment and the impulse to save
for a rainy day disappears. Without the Piatt Amend-
ment, under which the United States assures order in
Cuba, that island would be much nearer the conditions
under which it lived before 1898 than it is today. With-
out the Customs Convention of 1905-7, Dominican trade
and internal development would have continued to lag
as they did in the previous decade. These Cuban and
Dominican agreements are imperfect guaranties of or-
der, it is true, as is shown by the interventions which
have proved necessary under them. But they are steps
toward an increasing recognition that order is essential
to progress. They witness the fact that closer relations,
both commercial and political, with the United States
will contribute solid advantages to both parties to the
agreement. Whether the "big brother" relation de-
velops into real membership in the same political family
is comparatively unimportant, but the object lesson of
Porto Rican development cannot fail to make a deep
impression on all West Indian peoples.1

1 Recent discussions of Porto Rican commercial conditions are
Commerce Reports, May 25, 1915; Aug. 4, 1915; and A. G. Robin-
son, Commerce and Industries of Alaska, Hawaii, Porto Rico,
and the Philippine Islands, Department of Commerce and Labor,
Special Agents Series, No. 67, Washington, 1913.

Late trade returns are found in Monthly Summary of the For-
eign Commerce of the United States, Washington.

CHAPTER VIII

OUR RESPONSIBILITIES IN THE DOMINICAN
REPUBLIC

I. POLITICAL

Not more than two days' sail from the continental
territory of the United States, and so close to Porto
Rico that small boats pass from one island to another
with ease, lies the island of San Domingo. This ter-
ritory has probably staged more revolutions of the
"soldier of fortune" type than any similar area in the
world. Its two republics, Haiti in the western third
of the island, and the Dominican Republic, popularly
known as San Domingo, in the eastern two-thirds, have
been ever since the winning of their independence little
"republican" cauldrons, in which revolutions were con-
stantly boiling, or little despotisms, in which black Na-
poleons crushed out all disobedience to their authority
with an iron hand.

Potentially, this territory is of exceptional value. The
second of the great islands of the Caribbean in size, it
ought to hold the same rank in commercial importance.
Many times the size of Porto Rico and of Jamaica;
equal, in fact, in area to three Marylands with a popu-
lation almost three times as great, its position in the
Caribbean should be second only to that of Cuba. But

106

RESPONSIBILITIES IN SAN DOMINGO , 107

after the expulsion of France and Spain, who formerly
held control of the territories now included in the two
republics, the island, whether under one government or
divided between two, has seldom been free from civil
disorder.

The population of the larger country, the Dominican
Republic, is mulatto. There are few whites in the
country except foreigners engaged in business or sugar
and cocoa production. Politically, the whites are a neg-
ligible fraction. The total population is little more
than 725,000 or only about sixty per cent, of that of
Porto Rico, or slightly less than one-half that of Haiti.

In climate, the Republic offers great variety. It is
cooler than its location would indicate for there is but
little low-lying land. It has almost untouched natural
resources in both agricultural and mineral wealth. Es-
pecially in the last ten years important advance has been
made in the development of cotton, cocoa, sugar and
tobacco production, but the island is comparatively still
unexploited virgin territory.

The recent history of the Dominican Republic may
be judged by a brief review of developments there in
the period since our Civil War. During the Civil War,
in fact, Spain had reestablished her control, but at its
end withdrew.1 In this same period, the United States
first became actively interested in the territory, for the
naval difficulties involved in blockading the southern

1 A Spanish account of this enterprise is Jose de la Gandara,
Anexion y Guerra de Santo Domingo, Madrid, 1884. See also
Samuel Hazard, Santo Domingo, Past and Present, With a Glance
at Hayti, New York, 1873.

108 CARIBBEAN INTERESTS

ports had shown the advantage to us of possessing in the
Caribbean a port which our ships might use as a base
of supplies. In 1869-70, our Federal Government took
serious steps toward securing control of at least a por-
tion of the Republic, but the plans fell through, and in
the thirty years following 1865 there occurred twenty
general revolutions, and twenty-five national adminis-
trations held power and fell. The history of the coun-
try is a recital of a continuous series of revolutions,
bloodshed and anarchy, followed by the peace imposed
by lawless dictators. Plundering of property was con-
tinual. Natives were terrorized and foreigners gradu-
ally driven from the country. Social demoralization
and economic degeneracy set in. The Republic gradu-
ally slid back towards barbarism. The country was
flooded with paper money, metal disappeared from cir-
culation, domestic and foreign loans were contracted
with no regard for the possibility of their payment.

At last, in 1882, there came into control a man, who
by his power to dominate the population, seemed at least
to assure order. This was Ulises Heureaux. He re-
mained absolute dictator for seventeen years. Part of
the time his dummies were in office so that the constitu-
tional forms as to the number of years which a president
might hold office might be observed. But Heureaux
was always the power behind the government. Peace
had come at last, but it was peace under a despotism.
It was the peace of exhaustion and terror, brought not
by the establishment of order as we understand it, but
by the complete breakdown of ability to resist. In 1899,
Heureaux finally fell at the hands of an assassin. He

RESPONSIBILITIES IN SAN DOMINGO 109

had increased the already heavy debt which the country
had inherited from his predecessors to $20,000,000.

During his rule there had been a show of prosperity,
but it had been brought by selling concessions and by
contracting foreign loans which were wasted in pur-
poseless government expenditures. Credit was broken
down, and roads had fallen into disuse. It was re-
ported, in fact, that at the end of the nineteenth cen-
tury there were but ten miles of roadway in the Re-
public. It had become a proverb with the people that
when a traveler came to a bridge he should go around it.
Communication with the interior was exclusively by foot-
paths and mule trails. Industry was practically at a
standstill, except in so far as it relied on the gathering
of wild products. The only exception to this rule was
in the seaports where some semblance of peace was kept
by the unpaid troops and revolutionary activity was
checked at the range of the guns of warships.

The next five years of the history of the Dominican
Republic, 1899-1904, were worse, if that is possible, than
the previous period under Heureaux. It has been aptly
described as a period of national nightmare. Figuero,
Vasquez, Jiminez and Vasquez again controlled the
presidency. Then came Wos y Gil and finally Morales,
in 1905. By this time the debt had risen to about $32,-
000,000, and the country could not pay even the interest
on its obligations.

Foreign nations, also seeing the possibility of entire
extinction of their interests, began to press more in-
sistently for payment of the loans made by their citi-
zens and for the protection of the property of foreign-

110 CARIBBEAN INTERESTS

ers in the island. The character of the claims upheld
was various. Some involved government loans made in
good faith, others investments in local enterprises which
were of purely business character. The greater pro-
portion, however, no matter what country was involved,
were investments of a highly speculative character, often
tinged with fraud and corruption. But the character
of the claims was not the thing which at the moment
demanded the attention of the Government, for the con-
tinually increasing pressure which the creditors put upon
the Republic threatened to overthrow not only the ad-
ministration for the moment in power, but the state it-
self.

The sort of property interests which the countries
were called upon to protect may be illustrated by the
chief American claim, much better than the average,
that of the San Domingan Improvement Company of
New York. This company was the successor of the
Westendorp Company, a European corporation which
had loaned the Dominican Republic £170,000 in 1888.
It secured the right to collect all the customs revenues
to satisfy this claim, and with some interruptions did so
until 1893 when its interests were bought out by the
San Domingan Improvement Company. This com-
pany collected customs until 1901, when Jiminez, one
of the successors of Heureaux, appointed a board of his
own, known as the "Committee of Honorables," to do
the work. But instead of devoting the receipts to paying
off the debts for which they were pledged, this commis-
sion, in spite of its name, diverted the payments to can-
cel the revolutionary debt of their leader. This and

RESPONSIBILITIES IN SAN DOMINGO 111

certain English claims were settled by protocol in 1903,
but the payments promised the Dominican govern-
ment failed to observe. The same was true of certain
French, Italian, and Belgian claims upon which these
respective governments were asking payment.1

This was the condition of things when in 1905, with
credit destroyed and the country on the verge of an-
archy, President Morales felt that he could no longer
resist the pressure of foreign governments, especially
that of European countries. It was reported, in fact,
that Italian and French vessels were already on their
way to the island to use force where suasion had not been
sufficient. Once landed, and in control of the custom
houses who could tell when those marines would depart?
Under these conditions Morales did the only thing which
distinguished him from other Presidents of the Repub-
lic. He appealed to the United States to shield his
country from foreign interference.

Should the United States interfere in helping the
Dominican Republic out of her trouble? On this point,
there were and are two groups of opinion in the United
States. One follows our traditional policy of non-in-
terference. Revolutions in Central America, northern
South America and the Caribbean republics had long
been a matter of course, and the United States made
no move to secure their prevention. In fact, our own
territory had been the ground on which money had been
raised and arms collected by which many of them were
made possible. Those who believed that the policy of

1 Hollander, J. H. Financial Difficulties of San Domingo; An-
nals, Amer. Acad, of Pol. & Soc. Sc. 30, p. 93, et seq.

112 CARIBBEAN INTERESTS

"hands off" was the correct one, that we should still
insist that all states were equal no matter how much the
facts contradicted that statement, thought of course that
in this Dominican case, too, we should do nothing. If
European countries cared to hack up their citizens by-
punishing the country that was their affair, not ours.
If the matter concerned us at all it did so only in that
we would not allow a European country to acquire a
new colony in the West Indies.

The other group of public opinion was one which con-
sidered present-day conditions rather than our tradi-
tional position. For close on one hundred years, they
argued, the people of the Republic had been experi-
menting with self-rule and had made an ignominious
failure of their attempts. They were but little, if any,
farther ahead than a century before. They had spent
their money like a small boy, without any idea of future
needs. They had lost all the advantages that supervi-
sion by the European powers had brought them in the
colonial period. Personal rights were non-existent, il-
literacy increasing, property unsafe, sanitation unheard
of. The sugar pans, on the extensive plantations, which
had been so prosperous in the Spanish regime, were rust-
ing in the places where they lay on the morning of in-
dependence. If it is true that any people by failing to
use its opportunity should lose it, then the people of
the Dominican Republic deserved to lose theirs.

Their shortcomings, now that they were threatened
with national extinction, the Dominicans themselves
recognized. They appealed to us to help them, not to
avoid the just consequences of their extravagance, but

RESPONSIBILITIES IN SAN DOMINGO 113

to keep them from destruction and to show them a way
to pay their debts. In addition to the humanitarian mo-
tive to help out a weak people, it is but fair to say that
the United States was interested because we had cer-
tain concrete national interests which were affected.
Though our necessity for securing a coaling station in
the West Indies was now very much less than it had
formerly been, since by this time, 1905, we had acquired
Porto Rico and a coaling station in Cuba, still the im-
portance of conditions in the island for the United States
had in fact increased.

(1) If its sanitary condition were to continue deplor-
able and the island was to be a breeding place for dis-
ease in the Caribbean, comparable to Guayaquil on the
western coast of South America, then it would be a
constant menace to the health of foreign countries and
especially of the United States. This would increas-
ingly be true with the growth of our commerce in the
Caribbean, particularly with Cuba and Porto Rico.

(2) Further, and perhaps more important, no mat-
ter what might be our national attitude toward the de-
struction of civilization and the destruction of the prop-
erty rights of our citizens in the country, it was certain
that European nations would give their nationals effi-
cient support, and that action might have unfortunate
results for us. If European nations were disposed to
insist on payment and the Dominican Republic was in-
disposed to pay, the logical alternative for them if they
did not themselves take over the island was to take
possession of the principal ports by force and collect
the customs with which to pay for the loans. Such a

114 CARIBBEAN INTERESTS

procedure was one which would interest, not only the
claimants, but the United States, for too frequently
temporary occupation of a port ripens into permanent
possession, as China's experience proves. The taking
of a seaport in order to allow the collection of its cus-
toms dues might therefore be the indirect means of es-
tablishing a colony in the New World, a thing contrary
to the Monroe Doctrine.

Looked at in this light, this appeal for help, which
came to the United States from President Morales, in
1905, was, therefore, a thing which involved not merely
property interests or our general desire to see western
civilization in the New World developed, but also the
fundamental doctrine of our foreign policy. Would it
not be better to apply the ounce of prevention rather
than wait till the pound of cure would be necessary?

President Roosevelt was in sympathy with the second
group of opinion outlined, and in February, a month
after the request was received, a protocol was drawn up
by which the United States was to act in the role of
bankrupt's receiver for the country. It was recognized
by all that the Dominican Republic could never pay the
total of her nominal debts, if indeed she should be held
to do so since they were so honeycombed by fraud. Un-
der this protocol the United States was to adjust all
claims of foreign creditors and to assume control of all
the customs houses. We were to give 45 per cent, of the
customs receipts to the Dominican Government to run
its expenses, and with the other 55 per cent, all expenses
of collecting the customs, the interest on the loans which
the island should be held to pay, and payments on the

RESPONSIBILITIES IN SAN DOMINGO 115

principal were to be met. There was to be no reduc-
tion in the Dominican tariff without the consent of the
United States.

This proposed treaty President Roosevelt submitted
to the Senate, but it was not ratified. Consternation
greeted the announcement of its failure, and at the
Republic's earnest appeal President Roosevelt put
into force an executive agreement, not necessitating
the consent of the Senate, which accomplished prac-
tically the same purpose as the treaty. Under this
agreement the collectors of the customs were to be
Americans and to have the support of the American
warships. We were to act, not as a direct negotiator
in the affair, but in a position similar to that of next
friend. The substance, if not the form, of the proposed
treaty was adopted.

In arguing for its acceptance by his people, Sr. Fe-
derico Velasques, Minister of Commerce, declared:

Reason counsels men of good faith to throw aside distrust that
they may study our affairs dispassionately. It shows that the
American Government does not come to our aid entirely without
self-interest: On the contrary, it has in the affair a great and pow-
erful interest. The circumstances of its politics demand that Euro-
pean nations shall not establish themselves in America, and it is
to avoid that that it aids us. If our madness continues, if we do
not pay what we owe to the European creditors, there will come
a day on which, tired of waiting and pleading, the European Gov-
ernments will occupy our customs houses to get those debts and
perhaps part of our territory. If that time should come, the
American Government will have either to back down in its for-
eign policy, confessing that the Monroe Doctrine is a laughable
phantasm, or undertake a war with powerful nations, or pay those
debts, or guarantee their payment, charging itself with their col-
lection. Is it not good policy to forestall these eventualities, when

116 CARIBBEAN INTERESTS

not only the dangers may thus be avoided but an unhappy repub-
lican people can be aided to escape from its critical position? Is
it not good politics to give this aid when to these advantages there
is added the increase of influence in all Latin America, since it
is demonstrated that the United States aids without demanding
territorial compensation; and also a preponderance in a market in
which to sell a part of the products of the national agriculture and
industry? The United States are today, and will have to be for a
long time to come, the natural protectors of the weak Spanish-
American Republics, and in the heart of every patriot of these
nations there is a wound which bleeds, when memory recalls the
humiliations and exactions endured every time when this protection
has weakened or could not be asked or given.

As an honest man I must believe in the word of honest men
of other lands and I have no right to doubt the sincerity of those
who, possessing Cuba, a hundred times richer than we, a hundred
times more easily governed, retired thence voluntarily and raised
the island to the high rank of a sovereign nation.1

The result of the agreement in the islands was good.
Quiet and order, such as had not been known for two
generations, came to the people. Revolutions stopped
for there were now no customs houses to plunder. The
peasant planted and gathered his crops without fear
of revolutionary disturbances. The soldiers for the first
time received their pay. They no longer had to live by
pillaging the civil population. Business rapidly re-
vived in spite of the depreciated currency. Customs
duties, now collected by American officers, were actually
paid into the treasury. There was no chance of their
evasion by collusion with corrupt officials. All mer-
chants were therefore on an equal footing in securing
goods from abroad. Customs receipts which, in 1904,

1 Quoted in Deschamps, Enrique, La Republica Dominic ana,
Santiago de los Cabelleros, D. R. (n. d.), pp. 199-200.

RESPONSIBILITIES IN SAN DOMINGO 11

had reached only $1,852,000, rose steadily under the
protocol. At the end of two years they had increased
over 72 per cent.

Curiously enough, the Government now prospered
on forty-five per cent, of the receipts more than when it
received the entire amount. By the first of January,
1907, there was deposited in the Creditors' Trust Fund
in New York almost two and a third million dollars,
and at home revolutions had ceased, for with the cus-
toms houses manned by American officers backed by
American gun boats there was no longer any incentive
to start a revolution, for the great prize of revolutions,
control of finances, could no longer be won.

The favorable working of this temporary arrange-
ment with the Dominican Republic influenced public
opinion in the United States and the opinion in the
United States Senate in favor of the adoption of some
scheme by which our country should take for a long
period the supervision of Dominican finances. A new
treaty was drawn up in February, 1907, and ratified
by both governments. Meanwhile the Republic had
succeeded in getting a tentative agreement from her
creditors by which all her outstanding obligations were
to be refunded into a new loan of $20,000,000, to be
handled by Kuhn, Loeb & Company of New York.
This adjustment was made possible by scaling down the
claims of creditors from ten to ninety per cent., accord-
ing to the degree to which they represented bona fide
transactions. The nominal total of the debts had been
about $32,000,000. For this the Government promised
to pay about five and a half million dollars with about

118

CARIBBEAN INTERESTS

$12,000,000 interest. The total payment on all accounts
for the debts was approximately $17,000,000. The
financiers were to issue bonds for $20,000,000 and under
the new treaty the United States was to collect the cus-
toms of the island for fifty years. The provisions for
the division of receipts and their use were similar to
those in the temporary agreement.

The effect of the agreement on Dominican foreign
trade and the general prosperity of the island is un-
mistakable. It is quite as remarkable as the change
brought by the temporary arrangement of 1905-7. The
commercial revival is shown by the following table.

Foreign Trade and Customs Collection of the Dominican Republic

Year

Imports

Exports

Collections by Customs
Receivership

1905 ....

$3,096,263
4,281,337
5,156,121
4,767,775
4,425,913
6,257,691
6,949,662
8,217,898
9,272,278
6,729,007

$6,898,098

6,543,872

7,638,536

9,396,487

8,113,690

10,849,623

11,004,906

12,385,248

10,469,947

10,58S,787

1906

$2,502,154.31

1907

3,181,763.48!

1908

3,469,110.69

1909

3,359,389.71

1910

2,876,976.17

1911

3,433,738.92

1912

3,645,974.79

1913

4,109,294.12

1914...

3,462,163.66

1 There was a readjustment in 1907 by which the fiscal year was made to end
July 31 instead of March 81. In that period the receipts were $1,161,426.61.
These figures are from C. H. Albrecht and F. A. Henry, Development of the Do-
minican Republic, Special Consular Reports, No. 65, Washington, 1914, and Report
of the Eighth Fiscal Period, Dominican Customs Receivership. — Santo Domingo
D. R. April 15, 1915.

This remarkable showing was made in spite of the fact
that in 1910 at the instance of the customs officers placed
in control by the United States the tariff rates were
markedly reduced.

Prosperity in the Republic has not meant that the

RESPONSIBILITIES IN SAN DOMINGO 119

local conditions have become uniformly peaceful. Car-
los F. Morales, who brought about the agreement with
the United States, was in control until the end of his
term in 1908, when he went out of office — not by a rev-
olution— lived peaceably in the Republic, and has re-
cently died a natural death — an unusual thing for a
Dominican President. Raymond Caceres succeeded
him for the period ending 1911, but his term saw the
beginning of new revolutionary disturbances made pos-
sible again by the increasing prosperity of the country.
On November 29, 1911, Caceres left the house where
he was calling and on his way home was shot by political
enemies. He fled to a stable adjoining the American
Legation whence he was dragged by his friends into
the Legation. There he died a half hour later. A
young man, Alfredo Victoria, took control then and put
his aged uncle in office by going through the form of an
election. The other chief offices he filled with relatives.
His control was soon questioned by a revolt under Vas-
quez, near the Haitian border. Under pressure by
United States officers, Victoria resigned in November,
1912, and B or das was chosen to hold office until a gen-
eral election. On December 19, the revolutionary lead-
ers were informed by President Taft that any attempt
on their part to oust the Provisional President would
be resisted by the United States. The revolution con-
tinued, however, and shortly after President Wilson
came into office the insurgents held the suburbs of the
capital. President Wilson, in this situation, sent a com-
mission of personal representatives to the island who
arranged a compromise by which President Bordas re-

120 CARIBBEAN INTERESTS

signed and Baez was chosen Provisional President
Sept. 5, 1914. In October the election for Congress
was held under the "supervision" of a large number of
American officers and marines imported for the pur-
pose from Porto Rico. Mr. J. I. Jiminez was chosen.
The marines were then withdrawn, but late in Novem-
ber 1,000 were again sent from Guantanamo to quell a
revolt rising out of the election. On December 5, 1914,
Jiminez was inaugurated. He was the first regularly
elected President since Caceres was assassinated in
1911.

These renewed disturbances in the Republic have led
many to think that the degree of supervision which we
have now under our treaty is not sufficient effectively to
guarantee order. To be sure, the recent revolutions
have not affected so large a number of people as was
formerfy the case, but with the increasing prosperity of
the island many feel we will be forced to seek the insti-
tution of some such right of intervention as is guaran-
teed to us by the so-called Piatt Amendment in our
treaty with Cuba.

There can be no doubt that for the good of all con-
cerned, the Dominicans included, some arrangement by
which order shall be secured is essential. In addition,
an honest customs service in which efficiency is the
only qualification for appointment and advancement
in office, is needed. Both these must be had if the
Dominican Republic is to live up to what we believe
is her opportunity. That she has not the former, a
government which can keep order, is demonstrated by
recent events. For any defect of that sort the United

RESPONSIBILITIES IN SAN DOMINGO 121

States has no direct responsibility. For the honesty and
efficiency of the customs service we must stand sponsor.
We are in the Republic in a peculiar position. We
are handling other people's money by officers of our own,
and most of the people, in whose interest we are accept-
ing the trust, are quite unable to defend themselves.
They are 725,000 half naked mulattoes and black men,
not one in ten of whom can write his own name. We
should put men in office there who by training are quali-
fied for their positions, and they should not be removed
for political reasons. To introduce the spoils system in
a service in which we occupy a position similar to that
of trustee is not only contrary to the spirit with which
we allege we have undertaken our task ; it discredits our
efforts with the local government. It makes our claim
that we are undertaking supervisory powers from disin-
terested motives one to draw a smile from citizens of
other powers. There can be no doubt that applying the
spoils principle to a service such as we maintain in the
Dominican Republic gives body to the suspicion of our
motives in all our Caribbean policies.

When the United States was first asked to take charge
of the collection of customs, the appointee was a well
known economist, Mr. Jacob H. Hollander of Johns
Hopkins University, who had taken part in the revision
of tax laws in the island of Porto Rico. He had reor-
ganized tax collection in the Philippine Islands and had
introduced the revenue system there in force. After the
plan had gotten well under way, Col. Geo. R. Colton,
who had been in charge of the Customs Service in the
Philippine Islands, was sent to the Republic. Later

122 CARIBBEAN INTERESTS

he was succeeded by another officer of the Philippines
Customs Service, Mr. W. E. Pulliam. None of these
appointments were party appointments. Mr. Pulliam,
at least, the man who for the longest period has held the
responsible position of Receiver-General in the Do-
minican Customs Service, was a Democrat and was ap-
pointed by a Republican President. He was followed
by Mr. W. W. Vick, who in turn resigned the 9th of
July, 1914. It was alleged that this action was taken
because of a letter from the Secretary of State of the
United States indicating an intent to give the offices in
the customs service as "suitable rewards" for "workers"
who are "valuable" "when the campaign is on." *

What does our experience in the Dominican Republic
teach us? Two things, namely,

1. Our period of supervision shows what can be done
in a tropical island even with such inefficient labor as
the black or mulatto native population when order is
kept and property rights protected. The development
which has occurred in the Dominican Republic is not one
which touches only big business, though big business in
sugar estates and cocoa and banana plantations will, of
course, prosper by any improvement in conditions there.
The change is one which makes the laborer sure for the
first time in a century that the fruits of his labor will not
be wrested from him. Order we have introduced as the
basis of real ambition for the native and as an assur-
ance that the period when it was foolish for him to ac-

1 The letter of Secretary of State William Jennings Bryan,
about which this incident turns, is reproduced in Good Govern-
ment (New York), February, 1915, p. 26.

RESPONSIBILITIES IN SAN DOMINGO 123

quire more property than the shirt on his back is passed.
Our experience shows that with the introduction of
order these territories may become, for the world at
large, more important than they ever have been. There
is no reason why, under proper supervision, the Domin-
ican Republic, Haiti, and the republics in Central Amer-
ica may not develop their resources as Barbados and
Porto Rico have done.

2. In order to be in the strongest diplomatic posi-
tion we must see to it that the officers whom we put in
control of the "international" service which we create
shall be honest and chosen for efficiency, not for party
service. If we fail in this, "America for Americans"
must come to have an unwelcome connotation to the peo-
ple we have a peculiar opportunity to help. Those po-
sitions are not "suitable rewards" for henchmen who
have done good service in our own political struggles.
If they are thus disposed of, we cannot expect to have
that confidence in our agents which we should have, nor
can we expect our neighbors to look upon our policies
in America as other than narrow, nationalistic pro-
grammes dictated by the interests of politics, which are
at once partisan, provincial and corrupt. No man
should be appointed there because he is a "deserving
Democrat" or "reliable Republican."

II. COMMERCIAL

International commercial interests in the Dominican
Republic are predominantly those of the United States.
We furnish about two-thirds of the imports, and take

124 CARIBBEAN INTERESTS

four-fifths of the exports. Germany in normal times
occupies second place in the foreign commerce. Her
trade with the Republic was cut down by the European
War to the advantage of the United States. Her chief
export to the island is rice and she takes practically all
of the tobacco sent abroad.1 No country except the
United States, Germany, and Great Britain has as
much as three per cent, of the foreign trade.

Sugar production is rapidly increasing and this ar-
ticle with its allied product, molasses, constitutes nearly
one-half of the entire exports. A large amount of cane
is shipped to the mills of Porto Rico. The cocoa in-
dustry is the most widespread. Of its export value the
United States takes about four-fifths.

1 Report of the Eighth Fiscal Period, Dominican Customs Re-
ceivership cited above and Commerce Reports, Supplement, June
26, 1915, and July 15, 1915.

CHAPTER IX

THE HAITIAN PROTECTORATE
I. POLITICAL INTERESTS

The recently concluded treaty to establish a protec-
torate over Haiti is another step of the United States
in the imperialistic development following the Spanish-
American War. Steadily, quietly, almost uncon-
sciously, the extension of international responsibilities
southward has become practically a fixed policy with
the State Department. It is a policy which the record
of the last sixteen years shows is one followed, not with-
out protest from influential factions, it is true, but none
the less followed, by Administrations of both parties,
and of decidedly different shades within one of the
parties. Whatever developments may come which will
divide the people as to governmental policies, there
seems to be little doubt that any future Administration
will turn back upon the decisions taken. Protests will
continue but the logic of events is too strong to be over-
thrown by traditional argument or prejudice.

Already the United States has gone far indeed from

the position she consistently occupied up to the opening

of the twentieth century. It may be admitted that we

have been from the beginning of our history a colonizing

power, that we were always extending our control west,

south and north to secure new worlds for our rapidly

125

126 CARIBBEAN INTERESTS

increasing population, native and adopted, to conquer.
That is, of course, easily demonstrable, but it is also
true that in the strict imperial sense we had never been
a colonizing nation, with negligible exceptions, up to
the beginning of the twentieth century, that we were
not possessed of territory nor in control of any which
we did not look forward to seeing organized into states
as equal members of the American Union. Our only
intimate contact with dependent races was with those
which were found here when the white man came, or im-
ported in the days of slavery to furnish us a labor supply.

But in the brief period since the Spanish-American
War, we have gone far from this standard of presumed
equality, present or potential, of the political units over
which our Government exercises control. This differ-
entiation is in itself only a consequence of a recognition
of the fact which, even to ourselves, we have not been
ready to avow — the recognition of differences among
peoples as to political capacity. Amateur imperialists
though we are, we have become colonizers in the Far
East and in the nearer South ; our Administrations have
been reaching out for, or been driven toward, an in-
creasing control over all the weaker republics of the
Caribbean region.

If steps of this sort have already been taken there
seems at first sight to be no reason to conceive of the
new responsibilities in Haiti as any more interesting or
important than those assumed in connection with the
other communities mentioned. To a degree this is true.
The problems of administration with which we will be
confronted are certainly no more complex than those

THE HAITIAN PROTECTORATE 127

which confront us in the Philippines and the pride of
the Haitians surely no more punctilious than that of
the Cubans. Still Haiti is a problem different from
these. Its contrast lies, not so much in kind, as in de-
gree. The other units over which we have assumed
varying measures of governmental control have been
weak, but not all of them have been of such a character
that their dependence upon outside stabling forces for
the maintenance of order seems sure to be of indefinite
duration. The Philippines, among our dependencies,
come nearest to the position of Haiti in this respect.
Disregarding for the moment the question whether any
of these units could unaided hope to maintain a govern-
ment free from interference by the great powers under
modern conditions, let us look at their racial composition
so far as they lie in America, keeping especially in mind
the political capacity of which they and similar racial
groups have shown possession.

Porto Rico, of all Caribbean islands or countries, has
the greatest proportion of white blood. It has shown
marked elements of political stability though the action
of her representatives which forced the United States to
place limitations on the control of the budget showed
a disappointing lack of political poise. Cuba, in 1899,
had a population two-thirds white; Panama, with her
decidedly mixed population, had at least a dominating
class with a large amount of Spanish blood; San Do-
mingo is the mulatto republic; Nicaragua, with which
we have recently entered into closer relations, is pre-
dominantly Indian — probably to the extent of seven-
eighths of its population, but, as in Panama, the domi-

128 CARIBBEAN INTERESTS

nant group politically was, if not always of pure white
race, at least always controlled by men whose ancestry
was predominantly white. Haiti is the black republic.
Only since 1899 have white men been able to hold land
there or become citizens. There are few whites who
have even cared to take up residence in the country.

This review shows a curious succession of projects
of control, which have successively involved populations
less white. The chronological sequence coincides curi-
ously with the sequence when the populations are ar-
ranged according to color. The same general order ap-
pears if the test be political capacity.

Haiti represents not only a new responsibility ; it rep-
resents one different from the others in degree, so great
as to constitute almost a new problem. People of white
race have not only not been in preponderance, as in
Porto Rico and Cuba, but they have not largely influ-
enced the population through inheritance as in the Do-
minican Republic, nor have they been the dominant
class as in Central America. They have been, on the
contrary, of practically no influence in politics and of
only slightly more importance in the country's eco-
nomic life. In Haiti, a white man occupies a position
in which he is looked upon with prejudice perhaps
greater, certainly no less, than that which in the United
States is shown toward the negro. This generally ac-
cepted fact, easily explainable perhaps from history,
makes our Haitian responsibility one which may raise
problems far different from those which have con-
fronted us in the other territories in which we have ac-
quired possession or have assumed supervisory control.

THE HAITIAN PROTECTORATE 129

Haiti has few friends. Almost from the beginning
of her history she has been an international outcast.
There is little doubt that but for the fact that she profits
incidentally from the protection given all weak Amer-
ican countries by the Monroe Doctrine she would be-
fore now have ceased to be an independent country.1
Even the steps taken by the Haitian Government for
the advancement of human freedom, through the early
abolition of slavery, due to the peculiar situations then
existing in both European and American countries,
brought her no sympathy but were viewed with alarm.
The republic was one created by ex-slaves who had risen
in revolt against their masters; they had dispossessed
the legal owners of the land by confiscating their prop-
erty. The great slave-holding powers of the region,
England, France, Spain and the United States, looked
with disfavor upon her declaration of emancipation in
1804. Her shortcomings were exaggerated and the ex-
cesses committed by those who had sought to put down
the insurgents were condoned.

Knowledge of a successful black republic founded on
revolution could not fail to disturb the peace of slave-
holding colonies, such as nearby Jamaica, Cuba and
Martinique. No less was the unfriendliness of the
slave-owning interests in the United States to be counted
upon. England carried through the abolition of slavery
in her colonies in 1833, and this removed her chief ob-
jection to recognition of the republic. France, loath to

1 See MacCorkle, W. A. The Monroe Doctrine and its Appli-
cation to Haiti, Annals, Amer. Acad, of Pol. and Soc. Sc. 54, pp.
28-56.

130 CARIBBEAN INTERESTS

recognize the independence of her former highly-prized
colony, did so only by treaty in 1838, over a third of a
century after her control had, in fact, been brought to
an end. She abolished slavery in her own West Indian
colonies only in 1848. The slave interests in the United
States kept our Government hostile. They opposed
our participation in the Congress of Panama in 1826
because that Congress would have to pass upon the
recognition of the negro republic of Haiti and it was not
till the Civil War was well in progress that the Gov-
ernment at Washington formally recognized its inde-
pendence. Spain, last of the great West Indian pow-
ers to abolish slavery, was also unfriendly, and for a
brief period during the Civil War succeeded in estab-
lishing her control over her portion of the island, the
eastern two-thirds, as France had dreamed of doing in
Haiti.

Whatever might have been the performance of the
Government, there is little doubt that it would have re-
ceived a cold reception from powers who felt that the
Haitian Republic contained a menace to their own "do-
mestic institutions." But the wrong was not all on one
side and Haiti's turbulent history, which would be comic
if it were not so tragic, furnishes too many examples of
brutality and injustice. Her early excesses may be con-
doned. They were awful, but they were hardly worse
than those perpetrated upon her by her civilized ene-
mies. The French admirals, who put scores of revolu-
tionists in the holds of ships and then suffocated them
by burning sulphur under the tightly closed hatches and
who imported bloodhounds with which to bait negroes

THE HAITIAN PROTECTORATE 131

on the public squares, were quite as barbarous as any
of the negro dictators who tried to drive the rulers from
the country. We must remember that less was to be
expected from the blacks, some of them not even a gen-
eration from the African jungle, than was to be looked
for from our own great grandfathers.

On the other hand, let us not minimize the shortcom-
ings of Haiti — they are many. Our desire to be fair
must not lead us to excuse acts committed in our time
because similar abuses were general in former genera-
tions. Conditions, outgrown with us, may be a matter
of frequent occurrence, measuring the degree of national
advance, in another land. And this is the limitation of
Haiti; not that life there was of little value a century
ago, and that property belonged to him who could hold
it, but that these conditions continue general today at
a time when they have elsewhere become sporadic or
have been outgrown. It may be true that this is the
result of accident, a result of the fact that European
and certain American populations have nineteen hun-
dred years of governmental experience behind them and
the Haitian has not, but this explanation or excuse is
apt to have little influence on the moves of interna-
tional politics. Haiti must submit to be judged by pres-
ent-day standards, not by those of generations past.

An idea of the turbulent character of her government
can be gotten from a review of the fate of her leaders.
The George Washington of the Haitian Army of
Independence was Toussaint L'Ouverture, a black man
whose abilities would have given him a high place in
any society. His history is far from that outlined by

132 CARIBBEAN INTERESTS

his admirers, but he is doubtless the greatest man who
has come into prominence in Haitian annals. Betrayed
into the hands of the French Army, he died a prisoner
of Napoleon in France.1

The rulers of independent Haiti have seldom met with
better fortunes. Of the twenty-five who held the office
of chief of state down to 1915 three were assassinated.
One died from wounds received when a powder maga-
zine which had been located in the palace exploded. One
committed suicide. Three died in office. Fifteen were
driven out by revolutions; of these thirteen sought
safety in exile where four of them died. One, Nissage
Saget, President from 1870 to 1874, has the distinction
still unique in Haitian history, of living out his term,
retiring and dying a natural death in his country. No
wonder if able men do not become candidates for office
in Haiti.2

The details of the review are not important ; the condi-
tion which the list as a whole portrays is tragic. No
country, no matter what its natural resources, can pros-

1 For a description of the revolution, see T. L. Stoddard, The
French Revolution in San Domingo, Boston, 1914, passim; and
James Franklin, The Present State of Hayti, London, 1828, pp.
1-270.

2 Further details concerning the fortunes of Haitian Presidents
can be found in the following works from which this list is com-
piled:

Leger, J. N.: Haiti, New York, 1907-

Crichfield, G. W. : American Supremacy, 2 vols. New York,
1908, especially vol. I, p. 158.

Hazard, Samuel: Santo Domingo, Past and Present; with a
Glance at Haiti, New York, 1873, pp. 423-40.

THE HAITIAN PROTECTORATE 133

per when public order and private rights are so com-
pletely at the mercy of the mob. It may be true, as
apologists for Haiti maintain, that the people them-
selves are not vicious, but unable to direct their efforts
to advantage and easily misled. Our ministers, espe-
cially Mr. Basset and Mr. Frederick Douglas, have
testified to the peace-loving character of the peasant,
his amiability, his love of home. But the best that can
be said for the Haitian Government is that it is an
engine without a flywheel, which by its very energy
threatens its own destruction.

Disturbed politics have made foreign capitalists look
askance at Haitian investments. Such developments
as have been made are in industries which require little
outlay, or ones in which the chance of quick return is
so great that the venture is attractive as a business gam-
ble. Ear better endowed by nature than most of the
West Indies, the development of the foreign trade and
domestic commerce of Haiti has been checked for a
century because she could not guarantee protection to
property. Foreigners would not invest and natives
who succeeded in amassing a competence have preferred
to emigrate rather than take the risks involved in living
in their fatherland.

Politics have destroyed the former prosperity. Thus,
though the island was once one of the great sugar-pro-
ducing regions of the world — the most highly prized of
French colonies — today sugar is not an important export
and is manufactured chiefly for use in making the locally
consumed rum. Roads which formerly traversed the
islands in all directions are overgrown with trees a cen-

134 CARIBBEAN INTERESTS

tury old. Plantations, formerly yielding their owners
great profits, have gone back to jungle and bridges in-
terest the traveler only as picturesque ruins.1 Through
it all the negro presidents and their flatterers have kept
up the boast that Haiti is in the front rank of progress.
In 1810, the historiographer of Henri Christophe, de-
scribing the influence of his patron, shortly to be
crowned king, and his reception on a trip through the
provinces declares:

He is received throughout, not as the conqueror of the Mole,
but like a vivifying genius come to visit those parts. His amelio-
rating eye embraces all sides. ... If unjust and rapacious farm-
ers no more deprive them [the cultivators] of their labor, and grow
rich by the sweat of their brow; if cattle are allowed to ravage
no more their gardens and provision grounds; if the banana is al-
lowed to ripen on the banana tree, it is to Henry that these men
are indebted for it. He it is who animates industry, and gives life
to commerce. In his presence the people vent their exclamations
of joy, the unequivocal returns of a degree of affection and at-
tachment bordering upon idolatry.2

Haiti has continued in similar dreams of self-decep-
tion. In 1902, a German vessel during difficulties with
the government, fired upon a Haitian gunboat. The
commander seeing himself about to be conquered blew
up his ship. This drew the following pronunciamento
from Mr. A. Firmin, claimant for the presidency, writ-
ing from the National Palace at Gonaives, September
6, 1902.

1 Franklin, James, The Present State of Haiti, London, 1828, p.
271 et seq.

St. John, Spenser, Hayti or the Black Republic, London, 1889,
passim.

2 Sanders, Prince, Haytian Papers, Boston, 1818, p. 87.

THE HAITIAN PROTECTORATE 135

To the People and the Army: —

Our vessel, taken by surprise, was not able to defend itself;
Admiral Killick has immortalized himself in blowing it up. He
has met the death of the brave.

Boisrond Canal and the anti-patriots who surround him will
render an account of that action before history.

Never would the foreigner have thought to act so brutally to-
ward us without the request of that man. . . . Haitians, shame
to those who, forgetting their duty to the country, call on foreign-
ers to disgrace it. . . . Dessalaines, illustrious founder of our in-
dependence, and thou, Petion, and thou, Capiox, braver than death
itself, your sublime souls soared silently over this generous city
of Gonaives during that act of iniquitous aggression.

But I swear, with the brave citizens and soldiers who surround
me, to preserve the national honor entire. . . .

A. Firmin.1

Or take the open letter quoted by Mr. Hesketh
Prichard, not an official document like the two preced-
ing illustrations, but well depicting the lack of perspec-
tive of the average Haitian.

Mon Ami:

. . . They say we are human crabs, who do not advance in the
march of civilization, but move always backwards. In saying this
they add we must be driven forward — they propose a foreign pro-
tectorate. Before it is too late let us guard ourselves against these
adventurers, these liars. . . . Let us avoid the stranger; let us
spurn his attentions ! . . . Let us take precautions. Arm ! For-
tify ! Entrench ourselves ! . . . Then we can answer the stranger
who calls us a race of monkeys . . . with our guns ! The hearts
of our people are ready, they do not want in courage.

The English are brave. We conquered the English.

The French are a great nation. We drove them into the sea.

The victorious Napoleon himself sent his Myrmidons to snatch

1 Crichfield, G. W. American Supremacy, New York, 1908, Vol.
I, p. 343.

136 CARIBBEAN INTERESTS

back our new-bought liberty. We hurled them back. . . . Repulse
in a manner the most formal, the most energetic, any interfer-
ence of foreign nations in the affairs of our country. . . . We
need not despair. . . .

It has been said we are incapable of guiding ourselves, that we
cannot govern, yet to whom do we as a nation owe our liberty?
To our forefathers ! Alone they created the Haitian nation. They
bought for this small portion of the African race the right to live
in independence. We do not need foreigners to aid us. Since
we were born without consulting them, let us live without doing
so. . . . The envious peoples threaten us on all sides; they plot
against our liberties, they groan to enrich themselves at our ex-
pense! If we would live we must be on the watch day and night.
. . . We are conquerors, we are free, we do not wish to fall, to
degrade ourselves, to become valets and vassals. Then beware. . . .

Adieu my friend.

Agreez, etc.,

General Miles Bobo.1

Of course, actual conditions make a sharp contrast
with this grandiloquent rhetoric. Neither Christophe
or King Henri I, as he became later, nor Firmin nor
any of the other Presidents or near-Presidents has suc-
ceeded in giving his unfortunate country a position such
as its natural resources would justify. They have all
contributed to shatter the national honor to bits, not to
"keep it entire." European observers, whether pro-
Haitian or anti-Haitian in sympathy, have always com-
mented on the deplorable corruption of public life, neg-
lect of public order and of the most elementary public
services. One may quote at random from any writer
— the picture is almost identical. Haiti is and has been

1 Prichard, Hesketh, Where Black Rules White, Westminster,
1900, pp. 257-66.

THE HAITIAN PROTECTORATE 137

in an economic, social and political position which has
made her a trial to her few friends and an exasperation
to all others. The conditions to be found there at
present are reflected in the story of recent events.

For the last decade the political conditions in the
country have been growing steadily worse and have made
any plans for bettering the financial tangle impossible.
The last eight presidents have held office on the average
less than a year. Insurrectionary activity has been
practically continuous. That the country is in process
of "sliding back to barbarism" needs no demonstration
if one considers only the course of its public affairs since
the beginning of 1914. The sorry history of this period
shows the conditions which made foreign interference
almost alwajrs within the range of probabilities.

In January, 1914, President Oreste succeeded in put-
ting down a revolt. General Celestin and twenty other
leaders were summarily executed. Theodore and Zamor
then started uprisings, both opposing the Government,
but each seeking to put himself into the presidency.
American and German marines were landed to protect
the interests of foreigners. The revolts were successful
and President Oreste sought safety in flight to Colom-
bia. Theodore and Zamor now turned on each other.
Zamor was favored by the Congress and was elected
President on February 7th. He was recognized by the
United States and succeeded in putting down Theodore
temporarily. But in June Theodore was again in the
field and by October gained the upper hand, forcing
Zamor into exile, and himself into the presidency.
Meanwhile, the clouds of international trouble were

188 CARIBBEAN INTERESTS

gathering around the republic whose leaders were so
much engaged in righting each other. In May, Great
Britain, tired of being put off, sent an ultimatum
demanding payment of $62,000 indemnity. Zamor
managed to raise the money and that cloud blew over,
but the next month, with Theodore again in arms, Ger-
many and France made a formal demand for control
of customs. What would have been the outcome of this
situation had it stood alone it is impossible to tell. It
was certainly highly dangerous for Haiti and unpleas-
ant for the United States, carrying as it did the possi-
bility of European intervention. The European War
came in August and the Haitian treasury suspended
payment on all obligations of the Government. Theo-
dore came into power in October and the United States,
which had been an anxious spectator, undertook in De-
cember to secure supervisory control of the country's
finances. Theodore could not keep his seat until the
arrangement could be put through. The feeling against
him was said to be due partly to his willingness to
consider an American protectorate, including a grant
of a naval station at Mole St. Nicholas. In January
and February the tide was rising against him, and in the
middle of 1915 it took his life.

In the fighting preceding his violent death, a French
cruiser had landed marines to protect foreign interests
at Cape Haitien. The United States ordered Rear
Admiral Wm. B. Caperton, who had been at Vera Cruz,
to proceed to Cape Haitien with his cruiser, the Wash-
ington. Being of higher rank than the French com-
mander, this put an American in charge of the situa-

THE HAITIAN PROTECTORATE 139

tion. Caperton had hardly arrived at Cape Haitien
when both sides broke into unrestrained savagery at the
capital, Port-au-Prince. July 27, 1915, marked the
beginning of a ten days' reign of terror. Rosalvo Bobo
was gaining ground against President Guillaume-Sam.
The latter did not know whom to trust. He suspected
the citizens, he suspected his own troops. The support,
or at least the neutrality of the former, he sought to
assure by arresting and throwing into prison 160 repre-
sentative men. These he held practically as hostages.
Among them was an ex-President, Orestes-Zamor. One
of his own regiments the President rightfully suspected
of disaffection, and he decided it should be disbanded.
The regiment then went over to Bobo and aided in
an attack on the palace. Guillaume-Sam and his Gen-
eral, Oscar, defended the building, but unable to hold
it were forced to flee. Before doing so they put to
death all the 160 men held as political prisoners. This
act completed, Sam escaped to the French Legation
and Oscar gained the shelter of that of the Dominican
Republic.

When the populace heard of the wholesale murders,
a mob gathered, invaded the Dominican Legation and
from it dragged General Oscar to the street and shot
him. The next day, July 28, the mob attacked the
French Legation, dragged out Sam, shot him, dragged
his body through the streets, and Bobo proclaimed him-
self President.

Confronted by this situation, the foreign military
were prompt to act. Admiral Caperton landed marines
at Port-au-Prince on July 29 to protect the legations.

140 CARIBBEAN INTERESTS

During the landing, six Haitians and two Americans
were killed. An American battleship, the Connecticut,
was ordered to the port. By August 10, there were
1,400 marines ashore and 850 more on the way. In
addition, there was a small force of French marines pro-
tecting their Legation, with the approval of Admiral
Caperton. The American marines took possession of
the fort dominating the town, the barracks and a Haitian
gunboat. The Haitian Congress, not to pass unnoticed
for lack of activity, proposed the election of a President
on August 8. Admiral Caperton decided that, for the
moment, such action was inopportune, but his opinion
soon changed and on August 12th, under American
auspices, an election was held which resulted in the
choice of General D'Artiguenave.

Meanwhile, what had become of the negotiations
started eight months before looking toward an Ameri-
can fiscal protectorate? It is not to be wondered at if
these rapid changes in chief of state made difficult any
real progress in adjustment of international affairs.

President Theodore, as already stated, was urged by
the United States to accept a protectorate and his alleged
favorable consideration of the plan was said to be one
of the elements bringing his overthrow. His successor,
Guillaume-Sam, the United States refused to recognize,
hoping he would accept the proposed protectorate.
European powers, it was alleged, were so occupied that
they would not act and Sam would ultimately come to
favor the agreement. In April, 1915, a commission
headed by ex-Governor Fort of New Jersey was com-
missioned by President Wilson to seek supervisory

THE HAITIAN PROTECTORATE 141

power from Sam. But this plan was upset when
France recognized the new government, followed by
Italy and Germany. France, sorely tried at home, nev-
ertheless secured a loan of $1,000,000 and a promise of
more for the new government. Whatever may have
been Sam's real feeling toward a protectorate, the leader
of the next revolution was outspokenly opposed; Bobo
would have none of it.

The events of the latter part of July, involving the
violation of two Legations, apparently hastened matters.
Indeed, an actual fiscal protectorate seemed about to
come into existence whether a legal one did so or not,
for Caperton was putting naval paymasters in charge
of the customs houses of the ports. By the middle of
August, Admiral Caperton was reported as of the opin-
ion that the better classes were favoring an agreement
with the United States. There continued to be dissent
of course. The president of the Senate protested to
Washington against our occupation of the capital and
General Bobo declared the new President could not
have been elected without the help of American guns.
At the end of the month, he was in Porto Rico on his
way to the Dominican Republic and announced, "The
United States has long coveted Mole St. Nicholas
and the war in Europe gave an opportunity to get a
foothold. Haitians will never submit to the degra-
dation of outside interference." x Meanwhile, it was
said, the population of southern Haiti showed itself
willing to take a protectorate. The insurgents in the
north continued to refuse to lay down arms, but after

1 As quoted in the Independent, Vol. 83, p. 287 (1915).

142 CARIBBEAN INTERESTS

several minor skirmishes surrendered. The convention,
which at the end of August was being urged upon D'Ar-
tiguenave, the new Haitian President, was of much
more comprehensive character than the one in operation
in the Dominican Republic, for the United States was,
under it, to keep control of the expenditure of all moneys
and was to have the right to help in maintaining order.
Its chief provisions were :

1. A Haitian receivership of customs was to be created under
American control. There was to be an American Financial Adviser.

2. There was to be a native Haitian rural and civil constabulary-
commanded by American officers.

3. The United States, through its customs control, was to man-
age all expenditure of public moneys. The receipts were to be
devoted to the payment of the expenses of the receivership, to the
interest and sinking fund of the public debt, to the maintenance of
the constabulary and the remainder to the Haitian Government for
its current expenses.

4. Haiti was to promise to cede no territory to any nation but
the United States.

5. All revolutionary forces were to be disarmed.

6. The convention was to last ten years, and an equal additional
period if its objects were not accomplished within that time.

Secretary Lansing issued an announcement in which
he declared: "We have only one purpose — that is, to
help the Haitian people and prevent them from being
exploited by irresponsible revolutionists. These are not
properly revolutions; they are unorganized enterprises
which invoke no question of principle, and they are ruin-
ing the country. . . . The United States has no pur-
pose of aggression and is entirely disinterested in pro-
moting this protectorate. We have not even asked for
Mole St. Nicholas. The arrangement, of course, would

THE HAITIAN PROTECTORATE 143

have to be considered by the United States Senate for
approval." *

On September 4, Admiral Caperton proclaimed mar-
tial law in Port-au-Prince and on September 16 the
treaty for a protectorate was signed. The next day our
Administration recognized the new government with
D'Artiguenave as its head. The treaty was promptly
approved by the Haitian Congress and the Senate of
the United States. These events aroused but little
comment in the United States. The similar steps
taken by the Government before had accustomed the
public to the assumption of new duties in the Caribbean.
The European War distracted the attention from what,
for the moment, seemed minor problems. But the as-
sumption of a protectorate over people of as turbulent
a character as those of Haiti is not an undertaking of
small moment. It represents a responsibility far
greater than that involved in the treaty with the Domin-
ican Republic for the population is twice as great, it is
less peaceful, and the economic resources of which the
government has control are greater.

Weak states of the Caribbean, like weak states the
world over, are passing into eclipse. Whether any of
them will again emerge from the control of their power-
ful protectors only future developments can determine.
Outside America such an event seems unlikely, for the
taking over of control there, as a rule, is at best only a
step toward annexation. In America, on the other hand,

1 Literary Digest, Vol. 51, p. 456 (1915). The text of the treaty,
ratified Feb. 28, 1916, is found in Senate — In Executive Session,
Executive A, 64th Cong., 1st Sess. (Made Public Feb. 28, 1916).

144 CARIBBEAN INTERESTS

the supervisional agreements made by the United States
have been actuated by a less far-reaching motive. Had
this not been the case we could easily have found before
this the occasion for extensive annexations. It would
have been easy to prove that the disturbed states south
of us had become examples of the "divine right to mis-
rule," that they were in more ways than one a menace
to their neighbors, that they had "sinned away their day
of grace" and should lose their independence because
unable to use it.

But our policy has been to guide, not to dominate. As
is usual in such cases, our position is to be explained by
a mixture of motives. Some impulses have been altru-
istic, we have faith in republican institutions and want to
let our weaker neighbors work out their own problems
of self-government, but are willing to give them neigh-
borly aid, and in so doing the permanent governing of
one people by another has seemed opposed to the prin-
ciples of democracy. We have sought to make our
functions temporary or make them preventive rather
than corrective. Political motives also have urged us
toward control. If some supervision is necessary we
prefer that it should be our own rather than that of
some European power. It would complicate our for-
eign policy and involve a reversal of our traditional
position to allow non- American powers to interfere.
Taken all in all, the expansion of our authority has been
imperialistic only in a modified sense. The partial
eclipse which it has seemed to involve for weak Carib-
bean states does not mean that we are taking the first
steps toward their national extinction. That annexa-

THE HAITIAN PROTECTORATE 145

tion will never come in any case it would be foolish to
assert. That it will occur in a case where guidance
without actual possession by the United States will
bring peace is unlikely. The attitude of those who have
guided our foreign policy toward our weak neighbors
may be judged by the declaration of one of those who
in recent years did much in its shaping. Secretary of
State John Hay writing to Mr. J. N. Leger, the Min-
ister of Haiti in Washington, declared in February,
1905, "In reply to your inquiry addressed to me this
morning, I take pleasure in assuring you that the Gov-
ernment of the United States of America has no inten-
tion to annex either Haiti or San Domingo, nor does it
desire to acquire their possession either by force or by
means of negotiations, and that even in case the citizens
of one or the other republic should ask incorporation
in the American union there would be no inclination on
the part of the Government or in public opinion to ac-
cept such a proposal. Our interest in harmony with
your desires is that you should continue in peace, pros-
perous and independent." *

II. ECONOMIC INTERESTS

The natural resources of Haiti are said to be of great
value but their development has only begun. The rich-
ness of the soil — the national life depends almost en-
tirely upon agricultural products — is testified to by the
fact that within its 10,200 square miles the country sup-

1 Deschamps, Enrique, La Republica Dominicana, Santiago de
los Caballeros D. R. n. d., p. 201. (Translation.)

146 CARIBBEAN INTERESTS

ports about 2,000,000 people, giving it 196 inhabitants
to the square mile. It is, thus, one of the most thickly
populated of American states. Commercial develop-
ment has been hindered by the plague of revolutions and
by their accompaniment — bad financial management.
The monetary system is nominally based on the gourde,
of a value of $.965 gold. But no gold has ever been
coined and the silver pieces which were issued have van-
ished. The actual currency is United States gold
which stays in the country, due to the fact that all export
taxes and a percentage of the import dues must be paid
in that medium. Supplementing the gold currency
there are fluctuating irredeemable paper bills of the
value of one, two and five gourdes.

The most important commercial product is coffee.1
Cocoa holds second place. Other articles figuring prom-
inently in the exports are cotton, cabinet and dye woods,
honey, hides, and orange peels.

It is not to be expected that public records will be
accurately kept in times of such continuous civil dis-
turbances as have been the lot of Haiti. During revo-
lutions the import customs are whatever the local author-
ities will accept and the government is regularly cheated
of a large portion of its just return from the export
tax on coffee. As a consequence, trade statistics are
often unobtainable and always unreliable. In some
years the best estimates of the value of Haitian export
trade are alleged to be gotten by adding up the de-
clared imports from the island into other countries

1 The coffee exports reached 78,512,559 pounds in 1914. In
that year 6,088,084 pounds of cocoa were sent abroad.

THE HAITIAN PROTECTORATE 147

rather than by taking the locally compiled figures. Reli-
able estimates of value are not reported.

Due to her recent revolutions the foreign trade is now
not only not increasing but undergoing a decline.3 With
war raging, the coffee plantations were neglected. Our
consul at Port-au-Prince reported in June, 1915,
"Nearly all of the male population has been recruited
into the army, and in consequence but few have been
left to till the soil. Agriculture has been at a complete
standstill." 2

The United States does not figure largely in the
export trade. We have not learned to appreciate Hai-
tian coffee. The value of shipments to this country has
decreased over 40 per cent, since 1902. On the other
hand, we play a more important role in the import trade,
about three-fourths of which nominally comes from the
United States, though our consuls report that the fig-
ures for countries other than our own represent about
a 50 per cent, discount from the real value of the goods.
In this import trade France holds second place.

1 Commerce Reports, Supplement, June 19, 1915. Imports fell
steadily from a value of almost $10,000,000 in 1912 to $7,612,792
in 1914. Exports also suffered. The total foreign trade in 1914
is estimated at $19,415,684. See also Daily Consular and Trade
Reports, April 15, 1914, and Haiti, General Descriptive Data
(pam.), Pan-American Union, Washington, 1915.

2 Commerce Reports, Supplement, June 19, 1915.

CHAPTER X

THE RELATIONS OF THE UNITED STATES WITH
CENTRAL AMERICA

A review of the revolutions of the Central American
republics is wearisome and serves to emphasize a single
conclusion, that self-government is not a guaranty of
liberty, that the right of a nation to rule itself may
degenerate into the practice of continuous flagrant mis-
rule. No attempt is here made to follow the devious
path of Central American politics even since the begin-
ning of the present century, except as it leads to an
understanding of the problems confronting the United
States, or shows the motives governing its foreign
policy.

Up to the beginning of the twentieth century, the
attention of the United States in Central America cen-
tered around the possibility of constructing through the
territory of these republics a trans-isthmian canal, and
around the maintenance of the Monroe Doctrine. These
influences have continued to maintain interest in this
group of states, but they have been modified and accen-
tuated by the rapid expansion of American overseas
commerce, by the entry of the United States into the
field of world politics, as a result of the Spanish- Ameri-
can War, and by the increased dependence upon its
Navy which accompanied these developments. The

148

CENTRAL AMERICA 149

United States has come to dominate the Central Amer-
ican market; it is the chief buyer of Central American
produce ; American capital is invested there to a greater
extent than that of any other country. Moreover, the
holdings of the United States in Panama make it on the
lookout that no political developments shall take place
in Central America that would jeopardize the security
and usefulness of the waterway ; and, finally, the United
States is now, as formerly, solicitous that nothing shall
occur there which might call in question those broader
policies now connected with the Monroe Doctrine.

Central American problems present elements of un-
usual complexity.1 Geographical and racial divisions
make more difficult the questions usually arising in trop-
ical countries. Though the states are comparatively
small, they have not the elements of unity usually pres-
ent in such communities. With the exception of Sal-
vador, all the republics face both the Atlantic and
Pacific. Communication between the sections marked
off by the continental divide is difficult, and railways
are just beginning to bring a feeling of political unity
between regions which, though under the same flag, have
heretofore been highly contrasted in race-feeling and
economic interests. The low-lying swampy east coast
of Nicaragua, for example, has little in common with
the comparatively high Pacific region. The inhabitants
of the east coast are largely Indian; those of the west
coast, to a greater degree, are Spanish. The character-
istic industry of one section is the growing of bananas,

1 In this chapter the words "Central America" are used as ex-
cluding Panama which is treated elsewhere.

150 CARIBBEAN INTERESTS

the prosperity of the other depends upon the coffee
trade. The economic bonds of the east coast are chiefly
with the United States, from which also almost all the
capital for internal development has come; the west
coast is connected markedly with Europe. Similar con-
trasts can be drawn in the case of Guatemala and Hon-
duras.

Racially, the republics are in striking contrast to each
other. The predominantly Spanish civilization of Costa
Rica bears little resemblance to the seven-eighths-Indian
Nicaragua. The boundaries of the states do not coin-
cide with the natural barriers which cross the region — a
circumstance which has helped to foster plans of con-
quest on the part of factional leaders. In the long per-
spective of years, there is no reason for a group of states
in Central America ; it is a region of political divisions
where there should be political unity. That the various
attempts at confederation have failed is an excellent
example of the way in which particularistic sentiment,
based on local patriotism, may establish standards incon-
sistent with the plain dictates of logic. Geographical,
racial and political divisions all have contributed to keep
Central America a boiling pot for the century of its
independence. Confronted there by problems of such
complexity, it is not to be wondered at that the states-
men of the United States have looked upon those in
which we are concerned as involving serious responsibili-
ties, assumed of necessity rather than opening oppor-
tunities to be welcomed.

Had there been any design on the part of the United
States to adopt an aggressive policy in this region, the

CENTRAL AMERICA 151

incidents which could have been made the occasion for
the first steps have almost always been at hand. That
no radical j)rogram has been entered upon is evidence of
the forbearance of the United States; of its desire to
respect even the technical rights of weaker peoples, and
of its realization of the difficulty of improving condi-
tions even with the cooperation of the resident popula-
tion. Furthermore, Central American problems have a
psychological bearing more far-reaching than the region
in which they arise. They almost inevitably involve
not only the question of the good-will of Central Amer-
ica, but also the good-will of all Latin- American peo-
ples. The foreign policy of the United States, though
worldwide in its outlook and its interests, is, and will
continue to be, primarily American. Without the good-
will and cooperation of its neighbors the United States
can do little to improve international relations in the
New World. A line of conduct must be followed which,
in the long run, will commend itself to them as not only
strong, but just. This must be the policy of the United
States even though it may necessitate, in individual
instances, a sacrifice of present advantage, both vexa-
tious and costly.

The record of actions taken in the twentieth century
doubtless contains incidents which show the failure, in
the stress of circumstances, to keep this ideal clearly in
mind; but the story, in its entirety, is one which may
well be pointed to with pride, and be the source of great
national satisfaction. Taken in connection with what
the United States has done for the island communities
of the Caribbean, it is doubful whether there exists in

152

CARIBBEAN INTERESTS

history a better example of the national unselfishness of
a powerful nation.

Without exception, the states of Central America
have suffered from irresponsible leadership. Repeated
revolutions have wasted the national resources and re-
tarded their material progress, thus compromising their
relative international position. To add to the complica-
tions, these rapidly changing governments have resorted
to loans from abroad which have not only put a cumula-
tive load upon the public treasuries, but have threatened
the overthrow of national existence. The countries, of
which the creditors were citizens, have frequently insisted
on the repayment of loans at their face value, even when
the actual money paid over was but a fraction of this
amount and the conditions under which it was advanced
were flagrantly corrupt. Not one state of Central
America has escaped the necessity of repeated read-
justments of its foreign debt; and not one, it may also
be added, has received, from all the money borrowed,
actual value commensurate with the amount of its face.
The foreign debts, which at present burden the Central
American states, are shown in the following table:

Population and Debt of Central American States *

Country

Population 1913

(or Latest
Available Date)

Debt

Per Capita

Interest Rate

Costa Rica

411,000

2.119,000

589,000

690,000

1,210,000

$16,488,000 (1913)
17,577,000 (1913)

121,261,000 (1913)

9,189,000 (1913)

10,829,000 (1914)

$40.12
8.29

205.88

13.32

8.95

4- 5%

4- 8%

Honduras

5-10%

Nicaragua

Salvador

6%
2- 6%

1 Compiled from Statistical Abstract of the United States, 1914, Washington, 1915,
pp. 688-91.

CENTRAL AMERICA 153

In some cases these figures do not appear forbidding.
Much higher per capita debts are found in other coun-
tries with areas no greater. The picture, in reality, is
worse than it appears for the debts represent the result
of frequent readjustments with creditors, otherwise the
totals would be much larger. Furthermore, in judging
the burden of a national debt, the character of the people
and the natural resources of the country must be con-
sidered. A northern European or American popula-
tion might bear the tax necessary to support these bur-
dens with slight effort; but a non-industrial, generally
illiterate, mixed-race, tropical people might find them
overwhelming. When, for example, in Honduras, the
interest and sinking-fund payments must be drawn from
some "six hundred thousand half-naked Indians," it is
clearly out of the question to think of paying at its face
value their debt, now approaching $125,000,000.

The character of the country also makes these debts
larger even than they appear. The malarial, low-lying
coastal forests, and comparatively inaccessible hinter-
lands of the Central American tropics are not easy for
any race to conquer. Modern methods of transport have
only made a beginning. Many of the railway lines serve
only local developments, such as the banana plantations,
and without through traffic routes most of the territory
must remain in a backward or undeveloped condition.
This handicap the more far-seeing of Central American
leaders have not failed to discern. "Transcontinental"
railways have been the rosy dream behind many of their
unfortunate foreign loans. Too often the difficulties of
construction have been under-estimated, and the mone}^

154 CARIBBEAN INTERESTS

raised at ruinous interest rates has been wasted in abor-
tive lines which have soon degenerated into "two streaks
of rust." The actual coming of the "transcontinentals"
has been delayed until our own day, and even now their
traffic continues so meager, because of the slow response
in national development, that it seems inevitable that
the promised blessing will involve at least serious mone-
tary burdens.

Of the five republics under discussion, two, Costa
Rica and Salvador, are in fair financial condition ; Gua-
temala stands next, and Honduras and Nicaragua are in
the worst straits.

COSTA RICA

Costa Rica has an area of 18,691 square miles, equal
approximately to the combined areas of Massachusetts,
New Jersey, Connecticut and Rhode Island. Its pop-
ulation is 410,981, or about equal to that of Delaware,
or New Mexico.1 The country enjoys a healthful cli-
mate except in the coast districts, and the people are to
a greater degree Spanish in blood than in any of the
other Central American states. There are between
three and four thousand foreigners in the republic,
chiefly Spaniards and Italians. On the Atlantic coast
there are about 20,000 West Indian negroes, almost
exclusively in the banana industry.

The people of Costa Rica claim the best government
of Central America. They boast that for over forty
years their government has known no revolutions. The

1 The Costa Rican Government estimated the population at the
close of 1913 as 410,981. — Daily Consular and Trade Reports,
June 22, 1914.

CENTRAL AMERICA 155

constitution is liberal, and, what is more remarkable in
Central America, is respected and obeyed. Suffrage
is subject to educational and property qualifications.
The school system, with the exception of that of Pan-
ama, is the best from the United States to Chile; there
are more teachers than soldiers. The Government has
close relations with the chief economic development, the
fruit industry, which is in fact the basis of its pros-
perity. This connection is found not only in current
political affairs, but in the railway development and the
general finances of the Republic. Like other Central
American republics, Costa Rica has several times de-
faulted in the payment of her foreign debts. In the
early seventies she borrowed improvidently, giving as
security for loans issued at seven per cent, for about
three-fourths their face, the national domain, all na-
tional property, the liquor tax, coffee tax and the net
earnings of her railways. As a result, as early as 1874,
the Government was unable to meet its obligations. In
1885, an American, Mr. Minor C. Keith, brought about
a readjustment by which the bondholders took new
bonds for the old at the rate of fifty cents on the dol-
lar, the interest rates at the same time being reduced to
four and five instead of seven per cent. The Govern-
ment defaulted again in 1895 and 1901.1 In 1911, Mr.
Keith arranged a new loan with American bankers.
Since that date the interest charges have been promptly
met. Mr. Keith is said to hold personally more than

1 For the history of Costa Rican finance see the Annual Reports
of the Council of the Corporation of Foreign Bondholders,
London.

156 CARIBBEAN INTERESTS

one-half of the bonds of the Costa Rican debt, and the
fruit company with which he is connected, controls over
sixty per cent, of the active capital in the country,
including that invested in the railroads.

Contrary to the general rule in Central America, the
foreign trade of Costa Rica passes chiefly through the
Atlantic ports, the most important of which is Puerto
Limon. There are facilities here which allow steamers
to berth directly at the wharf. In 1913, 85 per cent, of
the imports went through this port, and 93 per cent, of
the exports were despatched thence. The chief Pacific
port is Puntarenas. There are regular steamship sail-
ings to Liverpool, Galveston, New Orleans, Mobile,
New York, Boston and San Francisco. The financial
conditions are better than in republics to the north. Gold
is usually at a premium of about 112.

Foreign trade shows a very satisfactory development.
In exports, the growth of the banana industry has
caused a sharp rise in the share of the United States.
The most important item in imports is cotton goods,
imported from Great Britain and the United States.
Railroad material, coal, foodstuffs and all other impor-
tant items, with the exception of rice, come chiefly from
the United States. In rice, Germany holds first place,
as she does generally in the trade in that article in the
Caribbean.1 The chief commercial countries divide
Costa Rican trade as follows:

1 The figures given in the various authorities cited frequently do
not indicate whether they refer to the calendar year or the local
fiscal year. It is therefore impossible to indicate where the war
in Europe may have affected the totals for the year cited as 1914.

CENTRAL AMERICA

157

Shares of Leading Nations in Foreign Trade of Costa Rica l
Exports from Costa Rica

Year

Value

United
States

United
Kingdom

Germany

1903

$7,319,145

8,890,000

10,322,000

Per Cent.
41.97
55.14
50.77

Per Cent.

48.88
39.76
41.83

Per Cent.
4.61

1911

3.37

1913

4.89

Imports into Costa Rica

1903.
1911.
1914.

252,982

50.20

21.57

838,000

46.29

17.34

685,000 (1913)

53.27

14.42

11.07
19.03
14.10

1 The percentages of trade for 1903 and 1911 are from Reports to the Board of
Trade on the Conditions and Prospects of British Trade in Central America, Colom-
bia and Venezuela, by G. |T. Milne, London, 1913. Percentages of imports for
1914 are Irom Commerce Reports, June 21, 1915. Percentages of exports for 1913
are from Daily Consular and Trade Reports, June 22, 1914. Trade totals for 1903
from Monthly Consular Reports, December, 1904, p. 130; for 1911 from Statistical
Abstract of the United States, 1912, Washington, 1913; and for 1913, Ibid. 1914.

In per capita purchasing power, Costa Rica is far
ahead of the rest of Central America. This is said to
be partly due to the fact that land ownership is there
more widely distributed than in the other republics, and
to the presence of the large number of West Indian
blacks in the banana industry, who receive compara-
tively high wages, and spend freely for foreign goods.
The comparative per capita production for export, and
the comparative per capita consumption of imports, is
shown in the following table :

Imports and Exports Per Capita in Central America *

Country

Exports Per Capita

Costa Rica .
Guatemala.
Honduras. .
Nicaragua .
Salvador . . .

825.11
6.82
5.60

11.18
6.34

1 Compiled from Statistical Abstract of the United States, 191L Washington,
1915, p. 694.

158 CARIBBEAN INTERESTS

Bananas are now the chief article of export consti-
tuting about one-half of the total.1 Costa Rica is de-
veloping into a typical "banana" republic, as Salvador
is a "coffee" republic. The total area under cultivation
for bananas is reported as 95,400 acres. Coffee, for-
merly first, now ranks second in value among the ex-
ports.2 About four-fifths of that exported goes to
Great Britain.

SALVADOR

Least of the Central American republics in size, Sal-
vador is far from that position in population and com-
mercial development. It has only 176 miles of sea
coast all on the Pacific, and the total area is 8,170 square
miles, about that of Connecticut and Delaware combined.
It is one of the most densely settled republics of the
New World, its people numbering 148.1 to the square
mile, or in total about 1,210,000. The climate is healthy
except on the sea coast, and the country shares with
Costa Rica the reputation of being the most orderly of
the Central American states. It is characterized as the
only republic in Central America with a middle class.
Salvador, unlike Costa Rica, puts great emphasis upon
her military policy, necessitated by the ambitions of

1 In 1913 banana exports were valued at $5,194,428. A total of
11,170,812 bunches were exported, of which 8,354,722 bunches
went to the United States, Great Britain taking practically all the
remainder. The banana exports fell to 10,162,912, valued at
$4,725,754, in 1914, due to ravages of the banana disease and fall-
ing off of trade due to the war (Commerce Reports, June 21, 1915).

2 Coffee shipped in 1913 was valued at $3,605,029, practically
all going from Puerto Limon.

CENTRAL AMERICA 159

Guatemala, which is dissatisfied with her own short Pa-
cific seaboard. Communication is better provided than
in most of Central America; and here, as in Costa Rica,
American financial interests are involved in the railway
development, especially in the road crossing the country
to pass through Guatemala, thus giving direct outlet to
the Atlantic, at Puerto Bariios.

The financial history of Salvador has been troubled.
From 1828 to 1859 there were constant revolutions, and
no interest was paid on the then existing obligations.
The debt, in 1860, was refunded at ninety per cent, of
its face. In 1889 began the important railway loans
for which the lines themselves have been pledged and
various charges placed upon the national customs. These
obligations, with the expenses for maintaining the army
to guard against the encroachments of her neighbors,
explain the excessive burden of taxation under which
the country labors. Salvador is having a hard time to
get enough to meet expenses. Every year since 1901
has seen a serious deficit which it has been impossible
to overcome in spite of a satisfactory increase in national
resources for taxation. It is doubtful whether the Gov-
ernment will be able to meet its obligations unless some
way can be discovered to cut down appropriations,
especially for military expenditures. This was one of
the results hoped for from the international agreement
of 1907, described later. In 1910, Salvador, hard pressed
by Guatemala, appealed to Secretary Knox for aid, but
the United States took no action.

Commercially, Salvador is not fortunate. There are
no good harbors and all trade is handled by lighters.

160

CARIBBEAN INTERESTS

About two-thirds enters at the port of Acajutla. Gold
is usually at a premium running up to 160 per
cent. The state is forced to high import duties and to
a heavy export duty on coffee. Coffee raising is the
mainstay of the national life. It constitutes between
two-thirds and three-fourths of the exports.1 The
only other important item is metals. Of these prac-
tically all go to the United States. The coffee goes
principally to France, Germany, the United States
and Italy in the order named. As in Costa Rica,
the United States is steadily becoming Salvador's mar-
ket.

The shares of the countries most important in the
trade of Salvador are indicated by the following table:

Shares of Leading Nations in Foreign Trade of Salvador *
Exports from Salvador

Year

Value

United States

United Kingdom

Germany

Italy

1901

1913.

$7,666,000

Per cent.
18
30

Per cent.
22
7

Per cent.
11
16

12%

Imports into Salvador

1902-1911.

Total Amount

33 yz

41

33
26

11
12

1913

$6,167,000

* The percentages of trade are compiled from Reports to the Board of Trade,
cited above; the trade totals for 1913 from Statistical Abstract of the United
States, 191b, Washington, 1915. The figures reported in these publications are
not uniform in all cases.

1 Out of the total export trade, in 1913, amounting to $9,411,112,
coffee constituted a value of $7,495,214. In all, 62,594,262 pounds
were exported.

CENTRAL AMERICA 161

GUATEMALA

Guatemala covers 48,290 square miles, or approxi-
mately the area of Louisiana. In population it is the
largest of the Central American states. Estimates vary
between 1,600,000 and 2,119,00c.1

The relations of the United States with Guatemala,
unlike those with her neighbors, Nicaragua and Hon-
duras, have been peaceful. The constitution is here ob-
served only as the Government chooses to observe it.
In 1898, Estrada Cabrera,2 an efficient tyrant, estab-
lished himself in control, and though the fundamental
law prohibits reelection he has since kept office continu-
ously. He was reelected in 1916 for the term ending
1923. There is no free speech, no free press. Under
Central American conditions — the friends of Cabrera
and his type agree — it is a question whether arbitrary
government, with order, is not to be preferred to "pop-
ular" government with incessant revolutions. At least,
under the former better guaranty is given that labor will
receive its wages and that capital will be secure, except
from forced loans to the Government. Whatever may
be our judgment on this point, there can be no doubt
that great material progress has been brought to the
Republic during Cabrera's Administrations. Besides
general betterment in foreign trade conditions, it is to
be noted that while there were in the country, in 1898,

1 Officially estimated on December 31, 1914, as 2,003,579- Com-
merce Reports, Supplement, October 30, 1915.

2 Cabrera, D. E. President Cabrera and His Career, Overland
M. n. s. 53, pp. 259-67.

162 CARIBBEAN INTERESTS

only 298 miles of railroad, there were 502 miles in 1914.
There are now in use almost four thousand miles of tele-
graph wire, as against one-half as much when Cabrera
seized control of the Republic. He has built roads to
replace mule paths and has brought about at least com-
parative order.

The recent financial history of Guatemala does not
present a showing so encouraging. Before the Cabrera
regime finances were in a state of chaos. There was al-
most no time when public obligations were not under-
going readjustment, or the payments upon them were
not in arrears.

Guatemala became a separate government on the
breaking up of the Central American Federation in
1827. Thereafter, the Government was in default on
its obligations from 1828 to 1855, and in 1863, 1876,
1878 and 1894. Since 1898, Cabrera has made by no
means an entirely satisfactory showing. In the year
of his election, the coffee export duties, which had been
hypothecated to secure certain English loans, were
changed, in alleged violation of the contract. In 1899,
the bondholders complained of further infringements of
their rights. German financiers undertook certain obli-
gations which still further complicated the tangle. At-
tempts at readjustment were made each year thereafter
till 1903. In the five years following, contracts were
entered into with an American syndicate. Copies of the
documents relating to the loans were to be deposited in
the United States Legation at Guatemala and the hold-
ers of the bonds were to have the privilege of asking the
protection of the United States in case the agreements

CENTRAL AMERICA 163

were violated. These agreements, the British bond-
holders alleged, infringed their previously acquired
rights.

Under Cabrera's rule the import and export duties
have risen remarkably. In 1898 they amounted to
$5,122,967, Guatemalan currency; in 1913 they were
$65,299,528, Guatemalan currency. Gold bears in nor-
mal times a premium over currency of about 1,900 per
cent.1 In spite of this improvement in income, how-
ever, the financial outlook is not bright, for expenses
have grown also; and in only two years of the period
from 1903 to 1913 did the revenues show a surplus over
expenditures. Whether the government will be able to
pull itself out of its present precarious position will de-
pend here, as in Salvador, upon the maintenance of
peace, the rapidity of the economic development of the
country,2 and the success which may attend the negotia-
tions for settlement of difficulties, such as the dispute
cited above, with British bondholders.

Guatemala is divided, like its neighbors, Nicaragua
and Honduras, into two zones ; one toward the Atlantic,
low, and until recently little valued ; and the interior and
west coast regions, which are higher and produce an
excellent grade of coffee. The exports reflect this geo-
graphical division. Imports are hampered by heavy
charges. Manufactures, as elsewhere in Central Amer-

1 Due to the European War the peso sank from 20.31 pesos to
$1 American gold in 1914, to 45 pesos to $1 on May 1, 1915 (Com-
merce Reports, Supplement, October 30, 1915).

2 The chief source used for statistics of Guatemalan finance is
the Forty-first Annual Report of the Council of the Corporation of
Foreign Bondholders, for the year 1911/., London, 1915.

164 CARIBBEAN INTERESTS

ica, are unimportant, but the tariff is highly protective.
Its rates are complained of as being so burdensome that
they retard, instead of aid, the industrial development
of the country. Sefior Manuel MaGiron, Secretary of
State in 1913, was an ardent worker for removing
oppressive tariff taxes on necessities and increasing
those on luxuries; but his efforts brought no material
change.1

In spite of the disadvantage of an illogical taxing sys-
tem Guatemala has, in recent years, made a notable com-
mercial advance. From a financial point of view the
republic is a German colony. It is estimated that 80
per cent, of the active capital is German. The proprie-
tors of business houses and plantations are also predom-
inantly of that nationality.

Of the exports, coffee constitutes about four-fifths.
Bananas are next in importance, and hides take third
place. The only other important exports are woods and
sugar. Germany, the United States and Great Britain
now practically absorb the country's exports, taking
over nine-tenths of the total. Germany takes about
half of the exports, chiefly coffee. Germans own coffee
plantations producing one-third of the crop, and it is
said hold mortgages on three-fourths of the rest.2 The
chief item in the share of the United States is practically
all the bananas.

1 Memoria presentada por la secretaria de estado y del despacho
de hacienda y credito publico a la asamblea national legislativa,
1918. Guatemala, 1914, p. 263.

2 Commerce Reports, Supplement, Oct. 30, 1915. In 1914, im-
ports were $9,331,114, and exports $12,754,026.

CENTRAL AMERICA

165

In imports, the same countries divide the trade, to-
gether furnishing over four-fifths of the total. The
United States furnishes about one-half of the goods
from foreign countries.

Share of Leading Nations in Foreign Trade of Guatemala 1
Exports from Guatemala

Year

Value

United States

United Kingdom

Germany

1904

1910

1913

$7,551,865
10,982,000
14,449,926

(1911)

Per cent.

30.3
23.5
28.0

Per cent.
16.9
13.4
14.0

Per cent.
46.4
56.6
50.0

Imports into Guatemala

1903

1910

1913

$2,345,500
6,514,000(1911)
7,959,326

45.2
42.6

50.2

18.7
21.2
16.3

20.7
22.5
20.4

1 Compiled from Reports to the Board of Trade, cited above; Daily Consular and
Trade Reports, September 30, 1904; Memoria presentada por la secretaria de estado y
del despacho de hacienda y credito publico a la asamblea nacional legislativa, 1913,
Guatemala, 1914; Commerce Reports, Supplement, Oct. 30, 1915; and Statistical
Abstract of the United States, 1912, Washington, 1913.

In the case of imports, the figures for the United
States make too favorable a showing, for a portion of
the goods doubtless represents a transshipment trade.

HONDURAS

Honduras is the third in size among the Central
American republics. It has an area of 46,250 square
miles, or about 3,000 square miles less than New York.
Its density of population is comparable to that of Nica-
ragua. In 1910, the population was 553,446, or about
13 to the square mile. As in Nicaragua, Indian blood
predominates. Seven-eighths of the people are said to

166 CARIBBEAN INTERESTS

be pure Indian. The population is asserted to have
declined in the last fifty years. The people of Euro-
pean birth number, at most, only two or three thousand,
chiefly Germans engaged in trade, and Americans in the
banana industry.

The recent political history of the state is practically
the story of the career of Manuel Bonilla in opposition
to the schemes of Zelaya, the tyrant of the neighboring
republic, Nicaragua. Indeed, Honduras during the pe-
riod from 1900 to 1913, was repeatedly made the ground
on which Zelaya staged his "international" complots.
In 1900, Manuel Bonilla headed a successful revolution
against Policarpo Bonilla, an understudy and puppet of
Zelaya. Arias became President long enough for Bon-
illa to be "elected." Policarpo Bonilla, the former Presi-
dent, was thrown into prison where he was kept till
1906. By this time, Zelaya was again dissatisfied and
sent a general to invade Honduras. Manuel Bonilla
fled to British Honduras, where he stayed till 1910.
Zelaya, then having other trouble on his hands, Bonilla
came out of retirement and headed a revolution against
the puppet Davila whom Zelaya had set up in 1907.
Bertrand became President in 1911, acting until Man-
uel Bonilla was "elected" and took office on February
2 of the same year. He held office for a little over two
years when he died, March 21, 1913, and Bertrand again
succeeded to the Presidency.

These turmoils and others of a similar nature that
make up most of the republic's history have not been
without influence on its financial condition. Nowhere,
the world over, can a worse record be found of the ma-

CENTRAL AMERICA 167

nipulation of public loans for private profit. Like Nica-
ragua, the country has been in financial straits practi-
cally since the beginning of its separate existence, now
almost ninety years ago. Insufficient revenues and fre-
quent revolutions induced repeated resort to foreign
loans on which practically no interest has ever been
paid.

Like most American states, Honduras has dreamed
of the great advantages to be reaped by good transcon-
tinental communication, and most of the loans sheltered
themselves behind this ideal. An example of the sort of
financial operations into which the state was led is the
loan financed, in 1866, by RischofTsheim and Gold-
schmidt. They were to float a loan of $5,000,000,
paying 10 per cent, interest and 3 per cent, to the sink-
ing fund. The bonds were to be issued at 60. Nomi-
nally, the money was to be spent for building a rail-
road. In fact, the whole enterprise was scandalously
fraudulent. The bonds were openly condemned in
the British Parliament in -1875. No thinking person
could have invested in them without being aware of the
corruption with which they were tainted. The total
revenue of the country at the time varied between
$250,000 and $300,000, yet the bonds called for an
annual interest payment of nearly $350,000. When
the issue was offered, only one bid was made, one of
$50,000 by the bankers themselves. Not more than
$255,000 ever actually went to Honduras as the re-
sult of this colossal imposition upon a weak people.
This transaction and others, nearly all of them simi-
larly tainted, have brought the Honduran debt up to

168 CARIBBEAN INTERESTS

a total, in 1913-14, of $121,261,000, an amount which,
when considered with the undeveloped character of the
country, is positively overwhelming. No interest has
ever been paid on the Honduran debt except from
funds secured by additional loans. No one now thinks
it possible for Honduras to pay her obligations at
their face. The only point of dispute is at what rate
they should be paid, namely, how much the bondholders
are willing to sacrifice to get something for their specu-
lative investment.

How tremendous the present debt of Honduras is,
may be judged by comparing it with the debt of the
United States in the period following the Civil War.
In 1870, our population was 38,558,371 and we were
carrying a debt of $2,331,169,956.21. The debt of
Honduras in 1913-14 was reported as $121,261,000,
her population 589,000. If the debt of the United
States had been as great per capita as hers now is, it
would have had to pay about $9,000,000,000 instead
of two and a third billion. Even this is only a faint
reflection of the real contrast, for the United States
was already in a strong economic position and was
just on the threshold of a wonderful industrial de-
velopment which would make the debt burden easier
for it to bear. Neither of these conditions is present
in Honduras.

Honduras has not questioned that she should pay for
the money received, but has insisted that because of
the fraud connected with the contracts, they should not
be enforced against her. The bondholders have
adopted the position that their claims are a lien on the

CENTRAL AMERICA 169

entire Republic, and that therefore any grants of fur-
ther concessions are to be opposed, since the chance of
payment of previous issues would thereby be reduced.
If this attitude is maintained, it means permanent po-
litical stagnation for the little state.

Since 1904, there have been a series of attempts to
adjust the claims of the foreign bondholders.1 Senor
Angel Ugarte proposed an agreement by which the
bonds were to be recognized at six per cent, of their
face — approximately their market value at the time.
Interest on the debt thus computed was to be paid at
four per cent, and sinking-fund charges to be turned
over, amounting to two per cent. For this proposal
the bondholders asked that another less favorable be
substituted; but this latter was unsatisfactory to the
United States in that it interfered with certain Ameri-
can concessions. American negotiations were sug-
gested, an alternative gladly accepted by the British,
who agreed to stop their negotiations pending the out-
come. During the next two years a proposal was
worked out by Mr. Wm. I. Buchanan, representing Mr.
J. P. Morgan and others. The bonds, then quoted at
from three to five per cent, of their face, were to be
replaced by a new loan on a four per cent, basis and
sinking fund. The bonds were to be bought at rates
ranging from five to twelve per cent, of their face, and
Honduras was to grant the bondholders a tract of some

1 See the Annual Reports of the Council of the Corporation of
Foreign Bondholders, cited above, and Samuel MacClintock, Re-
funding the Foreign Debt of Honduras. Jour, of Polit. Econ., 19,
pp. 216-28.

170 CARIBBEAN INTERESTS

200,000 acres. But this proposal like that of Ugarte
was rejected by the bondholders.

In 1908, Secretary of State Root, at the request of
Honduras, again took up the matter through Mr.
Buchanan. Before the parties came to an agreement,
Mr. Buchanan died and Honorable Philander C. Knox
succeeded Secretary Root in the State Department.
Secretary Knox entrusted the work to Mr. F. B. Jen-
nings, who succeeded in getting an agreement by the
bondholders to accept fifteen cents on the dollar and
forego all interest amounting to four times the prin-
cipal. A group of New York bankers were to finance
the new bond issue by which the money to pay off the
English creditors was to be raised.

All the terms of the agreement were conditional upon
the assumption by the United States of a degree of
supervisional authority over the Honduras Government,
similar to the one in the Dominican Republic, and prac-
tically identical with the agreement being proposed at
the same time for Nicaragua, discussed in connection
with that country. A treaty to bring about this end was
sent to the United States Senate January 25, 1911. In
January of the next year Honduras rejected the pro-
posal of the financiers, and in February the Morgan in-
terests withdrew from the negotiations. Later, another
proposal was made by another group of bankers, mak-
ing the charge per year less and the period of payment
longer. Meanwhile, still another group of American
banking interests, to meet the urgent needs of the Gov-
ernment, had advanced $500,000 at five per cent.,
secured by the customs revenue of Puerto Cortez.

CENTRAL AMERICA 171

Although Honduras has not debauched its monetary
system to the degree Nicaragua did by flooding the
country with paper money, the monetary conditions are
anomalous. Nominally, the country is on a silver basis,
but there is little of the national silver in circulation. It
contains a slight admixture of gold which makes its
export profitable and has had to compete with the
cheaper money of surrounding countries. Under the
operation of "Gresham's Law," it has practically dis-
appeared from local transactions. To help out the situ-
ation, commercial houses issue brass checks which cir-
culate on the credit of the companies that issue them,
and in the remoter districts small articles of common
use, such as candles, tobacco, matches and safety pins
circulate as currency. That business can be developed
to any great extent under such conditions is evidently
impossible.

The prosperity of the foreign trade depends, even
more than in Costa Rica, upon the banana industry.
Without it the state would be not only bankrupt, as it
now is, but unable to make even the small payment on
her obligations which, ultimately, will probably be pos-
sible. The United States market for fresh fruit has
practically alone kept the state alive. In production of
fruit the country has great possibilities. As yet, this
development is confined chiefly to the northeast coast,
near the ports of Tela, Ceiba and Trujillo, the latter
a community unique in its racial composition and its
economic arrangements. It is, in fact, almost an inde-
pendent state composed of as conglomerate a popula-
tion as is often met. Except on the coast, the people

172 CARIBBEAN INTERESTS

are Indians, with a small admixture of Spanish blood.
On the coast, where practically all the commerce of the
region is found, the banana plantations run by Ameri-
can capital have American overseers. The drygoods
business is controlled by Turks; other commercial ven-
tures are in the hands of Frenchmen, Italians and
Spaniards. The dock hands and laborers on the plan-
tations are chiefly Jamaica negroes, the minority are
"Caribs." Off the coast are the Bay Islands, for many
years controlled by Great Britain. There English is
spoken and the population of the island of Utila is of
white race. Economically, this heterogeneous popula-
tion is entirely dependent upon the banana trade, which
in this country has apparently unlimited possibilities of
development.1 A recent British Bluebook declares:
"The only limits to the expansion of the banana indus-
try are the capacity of the consumers and the supply of
labor on the plantations." Bananas now constitute
about fifty per cent, of the exports.

The position of the leading countries in both branches
of the foreign trade of Honduras and the steady in-
crease in the foreign exchanges are shown in the follow-
ing table.

NICARAGUA

The largest of Central American states is Nicaragua.

Its 49,200 square miles of territory make it comparable

in size to Louisiana or New York. It is fourteen times

the size of Porto Rico and its largest lake has almost

1 See Commerce Reports, Supplement, Feb. 23, 1915, for a good
description of the Honduras coast and the banana industry.

CENTRAL AMERICA

Shares op Leading Nations in Foreign Trade of Honduras *
(Fiscal Years Ending August 1)

Exports from Honduras

173

Year

Value

United States

United Kingdom

Germany

1903-04

$2,218,000
2,572,000
3,300,000
3,421,331

Per cent.

74.0
88.0
87.0
85.0

Per cent.

0
0
0

Per cent.

1910-11

1912-13

1913-14

5.0
5.0
4.8

Imports into Honduras

1902-03

$1,437,000
3,019,000

(1909-10)
5,133,000
6,624,950

70.0

70.0
67.0

79.4

7.0

13.0

14.0

6.9

8 0

1910-11

1912-13

1913-14

8.0
10.0

7.7

* Compiled from Reports to the Board of Trade, cited above; Statistical Abstracts
of the United States for 1911 and 1911f, and Statistical Abstract, etc. (British) House
of Commons, 1912-13, Vol. 105, Accounts and Papers 57 [cd 6099]; Daily Consular
and Trade Reports, September 9, 1914, and Commerce Reports, July 7, 1915. The
trade of 1913-14 was an increase of 22 per cent, over any previous year.

the area of that island; it is almost three times the size
of the Dominican Republic.

Though nominally under one government, Nicaragua
consists of two sections between which there is little
communication and less community of interest.1 The
continental divide, Lake Managua, Lake Nicaragua
and extensive forest areas, separate the more fertile
coffee and cocoa-growing Pacific slope from the low-
lying Atlantic section. So difficult is communication

1 An excellent survey of geographical and economic conditions
in Nicaragua is found in Commerce Reports, March 3, 1915. See
also Central America in General and Nicaragua in Particular. (Ed.)
Outlook, 106, pp. 18-23 (1914).

174 CARIBBEAN INTERESTS

between these regions that persons passing from one to
the other usually do so by way of Costa Rica, and the
small shipments of freight between the two usually go
by way of Panama.

In the Pacific region live at least 75 per cent, of the
inhabitants, including by far the larger proportion of
those of Spanish blood. The population of the eastern
or Atlantic section is composed chiefly of Mosquito and
Zambo Indians. Along the coast is a sprinkling of
negroes from Jamaica and the other West Indies.
There are some Americans employed in the banana in-
dustry and around San Juan del Norte a number of
English, but Spanish Nicaraguans are few. Taken as
a whole, the population is predominantly of Indian
blood. The more liberal estimates place the proportion
of pure whites at not above one-eighth. Immigra-
tion of people born in Europe or America is negli-
gible. Figures of population are no better than
shrew'd guesses. The total is variously reported as
between 500,000 and 690,000/ Even at the latter
figure the average to the square mile is but little over
twelve.

Education is of the most primitive character. Through
large districts even the most elementary instruction is
practically non-existent. Communication facilities are
equally inadequate. Roads are of the crudest kind,
many of which appear on the maps being mule trails and
unsuited for carts. Even the better ones are often
impassable in bad weather, especially during the rainy

1 Statistical Abstract of the United States, 19 H, Washington,
1915, p. 688, gives the population as 690,000.

CENTRAL AMERICA 175

season of the eastern section, which lasts from May to
October. There is passably good service by steamboats
on the principal rivers, and a beginning has been made
in railroad development. Communication by sea is much
better than might be expected. Both east and west-
coast towns are ports of call for American and Euro-
pean lines. Under such conditions internal develop-
ment of the country, especially on the Atlantic side,
obviously must be slow. Back from the coast and the
rivers the country becomes little more than the primi-
tive jungle. Cities, especially in the east, are conspic-
uously absent. The largest east-coast settlement is
Bluefields, a town of about 4,000 inhabitants.
Throughout most of the Republic there are practically
no industries. Sugar and native rum factories are
found in the western section, but these, with the excep-
tion of an electric light plant at the capital, a nail fac-
tory and a few establishments making ice, shoes and
soap, are the measure of the industrial development of
the country. With its population chiefly of Indian
blood, its poor educational system, its inadequate com-
munication and primitive industrial development, it is
not surprising to find Nicaragua less prosperous than
some of its neighbors.

Few countries have had a more troubled political his-
tory. The people have been a prey first to anarchy
and then to tyrants. To go no further back than 1894
we find the following extraordinary record. In the
ten years from 1900 to 1910 there were sixteen revolu-
tions. From 1894 to 1910 Jose Santos Zelaya kept
himself the most prominent figure in the country's poli-

176 CARIBBEAN INTERESTS

tics.1 Under his tyrannical power a systematic policy
of terrorization was followed. Concessions were sold
for almost any privilege, which international gambler-
investors would buy. The press was under strict cen-
sorship. Taxes, both on imports and exports and dif-
ferent for ports on the two coasts, became constantly
more and more oppressive. Another revolution broke
out in 1910 which received the diplomatic support of
the United States, and Zelaya was finally forced to
resign. Madriz succeeded him as President. Other
disturbances followed, and the necessity for more than
diplomatic intervention increased.

The year 1912 was marked by an unprecedented
degree of intervention in Nicaraguan affairs by the
United States. Though landing of troops to protect
property had been frequent, the internal affairs of the
Government had previously not been interfered with;
but this was no longer to be the case.2 A note from the
United States to Nicaragua had declared : "The policy
of the Government of the United States is to take the
necessary measures for an adequate legation guard . . .
to keep open communications and to protect American
life and property." This statement was issued after
125 planters in one region, besides many other Ameri-
can citizens, had appealed for aid.

The Nicaraguan Government, through its Foreign
Minister, had declared it could not give protection, as
all the troops were needed for putting down the rebel-

1 Palmer, Frederic, Zelaya and Nicaragua, Outlook, 93, pp. 855-9.

2 Brown, P. M., American Intervention in Central America, Jour,
of Race Development, vol. 4, pp. 409-27.

CENTRAL AMERICA 177

lion. He had suggested that the United States act.
He used the following significant words: "My gov-
ernment desires that the government of the United
States guarantee with its forces security for the prop-
erty of American citizens in Nicaragua and that they
extend this protection to all the inhabitants of the re-
public." The last portion of the declaration is espe-
cially significant. In the request for intervention the
representatives of foreign powers concurred.

In the late summer of 1912 troops were landed; pro-
tection was given to the railway property and the gov-
ernment in power was assisted in putting down the
revolution by aid in the capture of several disputed
towns.1 On September 25, Admiral Southerland
accepted the surrender of Mena, one of the chiefs of
the revolution, with 700 men. Another leader was
attacked, and with his army of 800 men driven into
Costa Rica. In all, about 2,600 Americans had taken
part in the operations. In October, 1912, the with-
drawal of United States troops was begun and by
December all had departed with the exception of a
legation guard of 400 men. This guard, later reduced
in numbers, has continued to stay in the country in the
interest of public order. The force numbered approxi-
mately one hundred men in 1915. General Mena was
detained in the Panama Canal Zone until April, 1913,
when his release was ordered by President Wilson. He
returned to Nicaragua and unrest again became evi-
dent. A state of siege for sixty days Mas declared in

1 A brief summary of these operations is found in Report of the
Secretary of the Navy, 1913, Washington, 1913, p. 34.

178 CARIBBEAN INTERESTS

February, 1914, but not brought to an end until Octo-
ber 11, 1914. United States forces were landed at
Bluefields on August 14 and the government was kept
in power onfy by their presence. Meanwhile, the Ad-
ministration fell into financial straits and declared itself
unable to pay foreigners the $1,000,000 which became
due in January, 1915.

Nicaragua, like its sister states, labors under a heavy
debt, partially due to the disturbed political conditions
which keep chronic disorder in the Republic. Not so
great as that of Honduras, it is nevertheless beyond
the ability of the impoverished state to pay.

Nicaragua, or at least a portion of the educated
class, cannot fail to recognize that the problems which
confront the Government, especially those involving
finance, are too difficult for it to solve. The ex-Presi-
dent Estrada, it is reported, when asked, "Do you want
a sort of American protectorate?" replied, "Yes, a pro-
tectorate along the lines exercised in Cuba and Panama
without, of course, impairing sovereignty. We want
the United States Government, whether it be Republi-
can or Democratic, to keep an eye upon us, to super-
vise our elections, in a word, to become an arbiter of
our destinies." The Taft Administration expressed the
attitude of the United States by declaring that the
United States "will lend its strong moral support to
the cause of legally constituted good government for
the benefit of the people of Nicaragua. . . . The United
States has a moral mandate to exert its influence for
the preservation of the general peace of Central
America." To help Nicaragua out of her chronic diffi-

CENTRAL AMERICA 179

culties and to make possible for the country a develop-
ment commensurate with its natural resources, both the
Taft and Wilson Administrations have sought to extend
to the Republic the substantial aid of the United States.
The degree to which this desire has taken the form of
giving military support to the government constitu-
tionally in power has been already indicated.

Contemporaneously, efforts have been made to bring
about an agreement which will make possible a super-
vision by the United States similar to that already estab-
lished in the Dominican Republic. A proposed treaty
was signed May 6, 1911, and submitted to the Senate
by President Taft in June. It provided, in brief, that
we should aid in the refunding of the national debt and
that the loans thus created should be secured by the
customs receipts. From a list of names approved by
the President of the United States, a collector-general
of customs was to be appointed who should administer
the customs in accordance with the loan contract. Nic-
aragua ratified the treaty, but the United States Senate
adjourned without voting upon it. New negotiations
were undertaken but nothing definite was accomplished
in the remaining days of the Taft Administration.

The advent of the Wilson Administration did not
change the attitude of the Government toward the pro-
posed Nicaraguan settlement. It announced May 30,
1913, that it would follow the revised Taft programme.
The protectorate plan under a new form was submitted
to the Senate July 20, 1913. Opposition to certain pro-
visions brought a change in its terms, and it was
redrafted and again submitted August 12, 1914. The

180 CARIBBEAN INTERESTS

treaty now provided that we should pay to Nicaragua
$3,000,000. In return we were to receive the exclusive
right to construct a trans-Isthmian canal by the Nic-
araguan route, control by lease for ninety-nine years of
Great Corn and Little Corn Islands off the east coast,
and of a naval base on the Gulf of Fonseca. The United
States was to be free to renew the lease for a similar
further period.

The Nicaraguan legislature, by unanimous vote, ex-
pressed its approval of the plan and the Committee on
Foreign Relations of the United States Senate reported
it favorably on December 16, 1914, but Congress again
adjourned in March, 1915, without taking action. A
general protest against this form of treaty was made in
Central America, more especially because of the naval
positions it was proposed to give to the United States,
and because the plan would be an obstacle to Central
American union.

Early in 1916 the treaty again came up for considera-
tion and on February 18 was ratified by the Senate.
In order to meet objections of the Central American
states because of alleged infringement of their rights,
the Senate added an amendment declaring it to be
understood that the convention was not "intended to af-
fect any existing right of any of the said named states."1
Shortly after the approval of the treaty by the United
States Senate Costa Rica was reported to have brought
suit against Nicaragua in the Central American Court
of Justice because the agreement violated her rights.

1 The text is found in Senate — In Executive Session, Executive
DD, 63-2, 64th Cong. 1st Sess.

CENTRAL AMERICA 181

While these negotiations were going on, the actual
finances of Nicaragua were the subject of discussion
with private individuals. Passable order, thanks to the
intervention of United States troops, was being estab-
lished ; but the need of at least a temporary advance of
money, pending the conclusion of the treaty, was ever
more insistent. Without some aid in the administration
of customs and in the reform of finances, it was evident
that the country would fall into a condition of general
anarchy. There were reported in 1911 to be upward
of 49,000,000 pesos in circulation and the exchange rate
against gold varied from 755 to 1,975 per cent, in the
years 1907 to 1911. * In the country districts even the
almost worthless paper did not circulate, and what
business was done was carried on by the exchange of
articles of common use. Early in 1912 a temporary loan
amounting to $1,500,000 was made by New York bank-
ing interests and later a further advance was granted
amounting to $755,000. A claims commission was ap-
pointed to adjust the various debts alleged to be owed
by the state.

Nicaragua, at the suggestion of the bankers who
made the loans immediately needed, placed C. D. Ham,
formerly collector of customs at Manila, in charge of
the administration of import duties until a treaty was
secured. Arrangements were perfected by which a
bank incorporated in Connecticut, the majority of the
stock of which was held by New York firms, was to aid
in rehabilitating finances. A new currenc}' system was

1 Reports to the Board of Trade, cited above. There is also
a good summary account of the loan negotiations.

182 CARIBBEAN INTERESTS

elaborated by Mr. C. A. Conant, of New York, and
Mr. F. C. Harrison, of London. The transformation
of the currency was put under way during the year
1912. Over $6,000,000 in paper pesos were burned in
that single year. The bank began operation in 1913.

Under the informal agreement, without treaty, cus-
toms receipts at once started to rise and by the 15th of
November, 1913, there was a gold reserve amounting
to forty per cent, of the then outstanding paper.1 By
the end of 1913 paper money in the amount of $37,300,-
000 worth had been turned in at the rate of eight and
one-half to one "cordoba," the new monetary unit, which
is the gold equivalent of the American dollar. This
process has now been completed and Nicaragua is on
the "gold standard." 2

In October, 1913, the two New York banking firms
which were carrying through the financial reorganiza-
tion issued a statement, "with the sanction of the Secre-
tary of State of the United States," outlining the posi-
tion in which they then stood. They had purchased 51
per cent, of the stock of the Pacific railways of Nicara-
gua— the only railway — and of the stock of the Na-
tional Bank of Nicaragua. Nicaragua owns the bal-
ance of the stock in each case. Loans had been ad-
vanced for which the customs were taken as a lien, sub-
ject only to the claims of some previous obligations.
Their contract with the Government required that the

1 Fortieth Annual Report of the Council of the Corporation of
Foreign Bondholders, for the year 1913, London, 1914, p. 242.

2 Ham, C. D. Americanizing Nicaragua, American Review of
Reviews, 53, pp. 185-191 (1916).

CENTRAL AMERICA 183

customs revenues should continue to be delivered into
the hands of an American Collector-General, recom-
mended by the bankers. In the two years of American
management of the customs, the receipts had doubled.
The railways were also to be operated by an agent of
the bankers. Two members of its Board of Directors
were to be nominated by the Minister of Finance of
Nicaragua, and the Secretary of State of the United
States "had the privilege of appointing one." 1 This
latter appointee acts as railroad examiner and makes
confidential reports to both Governments.

Though these informal agreements, not supported by
treaty with the United States, but evidently given the
backing of the Executive, seemed to be opening up an
avenue of escape from the former intolerable condi-
tions, the country was not at rest. President Adolfo
Diaz, who kept control, it was alleged by his enemies,
only because of American support, had to declare a
state of siege for 60 days in February, 1914, as stated
above, and a threatened revolution brought the landing
of American marines. Without some more formal
agreement than the one arranged by the bankers, with
the approval of the United States Executive, order
apparently is not assured. The war in Europe added
further to the state's troubles, and Mr. Ham on a visit
to the United States in April, 1915, reported that there
was great disappointment in Nicaragua over the failure
of the treaty, and that the country, without the aid of

1 For further details see Fortieth Annual Report of the Council
of the Corporation of Foreign Bondholders, for the year 1918,
London, 1914, p. 239.

184

CARIBBEAN INTERESTS

the United States, would be unable to escape bank-
ruptcy. It is to be hoped that the treaty with the United
States may bring the looked-for peace.

The foreign trade reflects the undeveloped condition
of the country.1 Though it is fourteen times as large as
Porto Rico, its foreign exchanges total less than one-
sixth as much as those of the island. The trade lies
in the control of four countries as indicated by the figures
below :

Shares of Leading Nations in Foreign Trade of Nicaragua 1
Exports from Nicaragua

Year

Value

United
States

United
Kingdom

Germany

France

1904

$3,926,000
4,556,000
7,712,000

Per cent.
53
34
35

Per cent.
12
14
13

Per cent.
13
18
24

Per cent.

1910

1913

22

Imports into Nicaragua

1902

$1,273,000
2,864,000
5,768,000

55
55
56

18
23

20

11
12
10

1910

1913

6

1 Compiled from Reports to the Board of Trade, cited above; Commerce Reports,
March 3, 1915; Statistical Abstract of the United States for 1912 and 191k, and
Statistical Abstract (British), cited above.

Among imports the most important items are textiles
and foodstuffs. The United States has practically a
monopoly of the latter, and occupies first place in all the

1 Commerce Reports, March 3, 1915. The total in 1913 was $13,-
482,053 in Nicaragua, that of Porto Rico was $86,003,627. This
year shows an unusual total, due to the fact that the political dis-
turbances of the year before prevented the marketing of much of
the coffee crop.

CENTRAL AMERICA 185

other items except textiles, which come largely from
Great Britain.

The chief economic resources of the country, avail-
able as exports, are coffee and bananas, which corre-
spond in a general way to the purchases of European
countries and the United States and to the exports from
west-coast and ea^»oast ports. Coffee forms about
two-thirds of the exports. It finds its chief market in
France, with Germany as the next competitor.1 Gold
is exported, chiefly to the United States. From the
east coast there are large shipments of bananas, all
going to the United States. The banana is, in fact,
the principal agricultural product of the eastern re-
gion though coconuts are gaining some importance.
With the exception of bananas and cassava, the greater
portion of the food supply of this region comes from
our ports.

A discussion of Central American affairs ought also
to include at least a brief mention of the Central Amer-
ican Court of Justice. At the instance of Mexico and
the United States, a protocol was signed in Washing-
ton, September 17, 1907, by representatives of the five
Central American states proposing to enter into an
agreement "to settle upon the means of preserving the
good relations between the said Republics and of obtain-
ing an enduring peace in those countries." At the ensu-
ing meetings,2 which were attended by representatives
of the five states and unofficial representatives of Mex-

1 Commerce Reports, Oct. 9, 1915.

2 Scott, J. B., The Central American Peace Conference of 1907,
Amer. Jour, of Int. Law, Vol. 2, pp. 121-44 (1908).

186 CARIBBEAN INTERESTS

ico and the United States, a number of agreements were
made, the most important of which was one establishing
a Court of Justice to which the Central American re-
publics bound themselves to take "every difference or
difficulty that may arise amongst them of whatsoever
nature it may be." Honduras, the keystone state of
the region, declared its "absolute neutrality in event of
any conflict between the other Republics" and the other
republics bound themselves to observe the neutrality of
Honduras on condition that she did herself. An addi-
tional treaty bound all the states not to take part in
the civil wars of their neighbors. Still another agree-
ment created and outlined the jurisdiction of the Cen-
tral American Court of Justice.1

Subsequently, the court was established at Cartago,
Costa Rica. It was heralded as the first court of
nations, to the bar of which any of the parties signatory
might be brought, even in cases "involving national
honor." It is unnecessary to say that the court has not
fulfilled the fond expectations of its friends. The cases
so far brought before it have been of minor importance.
The states through which it was established are them-
selves too unstable to give its decisions the prestige that
will assure acquiescence. Under Central American con-
ditions such an organization, well intentioned and
earnest though it be, is apt to remain a body that will
frequently enunciate the counsel of perfection, but sel-
dom the law which commands obedience.

1 These treaties are found in Malloy, W. M. Treaties, Conven-
tions, International Acts, Protocols a.nd Agreements between the
United States and Other Powers, Washington, 1910, p. 2391, et seq.

CENTRAL AMERICA 187

AMERICAN INTERESTS

A survey of the connection of the United States with
Central American affairs shows the same problems
appearing in all the states. There is, first of all, the
fundamental question of the protection of life and
property, a function of government which these states
have in the past been unable efficiently to perform and
one still apparently beyond the power of most of them.
The United States will be under the necessity of fre-
quently deciding in the future, as it has done in the
past, whether it will stand upon the technical doctrine of
equality of states laid down by international law, or
assume the duty of supervising these countries to insure
order. The policy of the United States may differ
with changing Administrations and the question may
be raised as to which is best to follow. In cases involv-
ing its own citizens, the decision will be one which,
though international, will be so only in a limited sense
— the question will include the particular Central
American state and the United States only. In cases
involving the lives or property-interests of citizens of
European, or other foreign powers, the United States
will have to keep in view broader policies. These cases
will also be international, but will involve a considera-
tion of the general position of the United States in
American politics. The United States will have to
decide the extent to which it is willing to allow other
countries a free hand in their relations with the weaker
American states. These questions will not arise in Cen-
tral America alone. They have been frequently raised

188 CARIBBEAN INTERESTS

elsewhere — witness, for example, the incidents in Ven-
ezuela, the Dominican Republic and Haiti, to cite only
the more prominent recent instances. Such cases involve
not only the narrower international questions, but a
decision as to what shall be considered allowable under
the national policy of the United States, "America for
Americans." Will it allow forcible collection of debts,
even under the conditions sanctioned by the Hague
rules of 1907? Will it allow such punitive expeditions
to take the form of demands for payment of amounts
which it considers unjust; or the "temporary" occupa-
tion of territory in which taxes will be collected to sat-
isfy claims, whether the control of this territory involves
merely the customs houses, ports or more extensive
areas ?

The practice of the United States in the past has
been one which shows no intention to abandon the gen-
eral policy of looking with disfavor upon interference
by non- American states. But whether the policy of
relying upon prestige to carry through any situation
which may arise is a good one is at least open to ques-
tion. Should important disagreements arise, when its
efforts were demanded to the full in some other direc-
tion, the United States might find it difficult or impos-
sible to insist on the observance of its historic position.
It might be a wise and excellent policy to so shape its
relations with these neighboring states that the occasions
for foreign interference with their affairs would be made
as few as possible. The United States might avoid
having great responsibilities thrust inopportunely upon
it by continuously assuming a small degree of responsi-

CENTRAL AMERICA 189

bility in maintaining order within their borders. By
assuming supervisory authority over their financial
affairs to the extent that no foreign loans should be
contracted by Central American States beyond their
ability to pay ; that resources pledged to the payment of
certain national obligations shall be applied to those
ends; and that property in industrial enterprises shall
not be subjected to arbitrary interference, or confisca-
tion, the United States might find in the long run less,
rather than greater, responsibilities. It is an applica-
tion to international affairs of the old proverb that pre-
vention is better than cure, already employed in the rela-
tions of the United States with Cuba, Panama, Haiti,
and, in a minor way, with the Dominican Republic.

There are also to be considered the conditions forced
upon the United States by the development of modern
imperialism. If it is to continue one of the great com-
mercial powers, it is reasonable to say that it must
adopt national programmes similar to those of the great
nations of Europe. Like them, it must spy out fields
for the investment of its surplus capital ; and what more
available field than the countries directly south? It
must foster diplomatic agreements that will promote
the prosperity of its foreign trade ; and such agreements
with its near neighbors will be of undoubted advantage,
especially when they are nations that will buy heavily
of its manufactured products and sell raw materials.

These trade interests, under the conditions now exist-
ing in the world, should be further protected, the impe-
rialistic argument runs, by adequate provision for open
international communications at all times, which means

190 CARIBBEAN INTERESTS

a strong navy with the possession of satisfactory naval
bases. This is another reason why the United States
should seek to conclude agreements which will put it in
a stronger position in Central America. That the im-
portance of these considerations is appreciated by the
Government of the United States is shown by the nego-
tiations for territorial bases on both Atlantic and Pacific
coasts.

These developments seem to run counter to the
"splendid isolation" which, since the early days of its
national life has been to the minds of many people a
corollary of the fundamental doctrine of the foreign
policy of the United States. England once boasted
of a similar position, but has now abandoned it for a
system of written and unwritten alliances. The argu-
ment against "entangling alliances" still meets a hearty
response in the United States as it did when Washing-
ton made his farewell address. But it is a question
whether foreign relations, under present conditions, are
more "entangling" without a series of agreements giv-
ing the United States formal supervisory power over
the weaker Caribbean countries than they would be with
such conventions.

A review of the cases in which we have actually inter-
vened, without formal agreement, to keep order in Cen-
tral America shows that our relations are already far
from lacking the possibilities of entanglements. If we
had a recognized duty instead of an assumed authority
upon which to act, it may well be that the occasions for
remedial action could be, in large part, removed by pre-
venting their occurrence. At the same time, the exer-

CENTRAL AMERICA 191

cise of authority, when necessity forced it, would be
shorn of the irritation it now causes in the states where
it is exercised.

That there are serious responsibilities with the dan-
ger of abuses in such a policy, it is needless to deny.
But strong men and nations do not hold back from
duties and opportunities as they present themselves,
through fear of responsibilities, or the possibility of
abusing power. The strong progressive nations assume
responsibilities and take pride in their ability to hold
true the balance between themselves and the weak.
No finer opportunity comes to any nation than this —
to help in bringing even-handed justice to peoples less
fortunate. Such a policy does not mean, at least of
necessity, annexation nor a permanent relation of in-
equality. The imperialism of the United States need
not follow, the popular opinion is against its following,
the standard set by foreign nations. The enthusiasm
for colonies shown by countries "seeking for interests to
protect" has left the United States unaffected. If it
had not done so, there would now be no international
Central American problem. This New- World imperi-
alism may have, to a degree, the same economic object
as that of European nations — to insure field for national
developments, to protect and foster the interests of its
citizens the world over — without adopting the policy,
traditionally used, of crushing out local sovereignty.

The expansion of the power and the interests of the
United States in the Caribbean may be perfectly con-
sistent with the independence of Caribbean communi-
ties. That it will be so is argued by our past perform-

192 CARIBBEAN INTERESTS

ance. It is quite probable that an increasing supervision
of these weaker countries by the United States will be
necessary and be requested. It is also not improbable
that here may be slight extensions of American pos-
sessions, especially the acquisition of naval bases; but
such acquisitions may be peaceful and to the advantage
of the weaker nations as well as the United States. It
is quite unlikely that the United States will adopt an
aggressive territorial policy, unless the very policy of
"America for Americans," which lies back of present
developments, be overthrown. The increase of the
power and influence of the United States is the strong-
est guaranty of the independence of the nations of the
Caribbean. They may come to stand toward us, tem-
porarily at least, in a position of de facto inequality,
some may ultimately disappear by union with us, but
without us few would be destined long to continue as
independent states.

CHAPTER XI

THE PANAMA REVOLUTION AND PANAMA TOLLS
I. THE PANAMA REVOLUTION

The history of the relation of Panama to Colombia
is a turbulent one. The Isthmus won its freedom from
Spain independently, but fearing that its own forces
would be insufficient to maintain independence, it
joined the larger republic, which had already estab-
lished its de facto independence under Bolivar. The
bond between the two was never stable and Colombia
was never able to establish order effectually. Insurrec-
tions were frequent and often no attempt was made by
the central government to put them down. The right
to leave the loose union of states which formed Colom-
bia was, for part of the time, recognized and by several
states acted upon.

In 1885, a new constitution was adopted by execu-
tive decree which, it was alleged, arbitrarily destroyed
this right of secession ; "the sovereign rights of the isth-
mus were terminated without its consent and it was
reduced to the status of a crown colony without repre-
sentation in Congress." 1 But after 1885 Panama con-

1 See documents appended to speech by J. Hampton Moore, in
Congressional Record, 63rd Cong. 2d Sess. Vol. 51, Part 17, Ap-
pendix, p. 743. See also Diplomatic History of the Panama Canal,
63rd Cong. 2d Sess. 1913-14, Sen. Doc. Vol, 15.

193

194 CARIBBEAN INTERESTS

tinued to be a part of Colombia. The state had no inde-
pendent foreign relations. Her constitutional rights
may have been violated but that was a question which
foreign nations could not consider in treating with
Colombia concerning the grants to be obtained on the
Isthmus.

In a large way, the center of Panamanian politics
has never been any local policy but a problem the solu-
tion of which necessarily involved aid from outside the
Isthmus. The greatest asset of the region is no natural
resource as that word is commonly used, but a physical
characteristic of the country, the fact that in it is found
the narrowest strip of land in the Americas separating
the Atlantic and Pacific oceans. Here, since at least
as early as the middle of the sixteenth century, the gov-
ernments and engineers of the world had been planning
the construction of a great artificial waterway which
would revolutionize the course of the world's commerce.
The northwest passage, which many of the early voy-
agers sought in vain, never materialized and the route
around South America by Cape Horn or the Straits of
Magellan was long and arduous.

If only an opening could be made at the Isthmus, the
west coast of North America and all but the extreme
southwestern coast of South America would be brought
nearer to the best European markets, and these markets
would have another way in which trade could pass to
the even more distant ports of Australia and the Far
Eust. With the earlier unsuccessful attempts to re-
alize this dream we are only incidentally concerned.
Most of them never became serious projects and the

THE PANAMA REVOLUTION 195

later efforts to build a canal made by the French failed
because of the then too great engineering difficulties,
the insufficient knowledge of medicine and sanitation,
the lack of capital, and the corrupt use of the resources
at hand.

The country which has been most actively interested
in the building of the canal has been the United States.
After the acquisition of Oregon and California the
republic was possessed of coasts on the Atlantic and
Pacific with which communication was important but
highly difficult. The long stretch of uninhabited terri-
tory separating the East and West made freight trans-
portation between the two by land practically impossible
and passenger traffic before the building of the trans-
continental railroads slow, trying, and not without dan-
ger. It was only natural, therefore, that our people
should have an increasing interest in the improvement
of all means of communication which would facilitate
exchange between the two coasts. Central American
and Isthmian projects for transportation facilities re-
ceived attention. As early as 1846 a treaty was made
with Colombia, then known as New Granada, giving
us a right of transit over the Isthmus of Panama. Three
years later we entered an agreement with Nicaragua
concerning a ship canal to pass through that country.
Plans for canals by both routes remained active projects
up to our own day.

In Panama, politics, except as they involved local
contests between leaders of the various factions, turned
about canal schemes, and Colombia, of which the prov-
ince of Panama was a part, realized increasingly that

196 CARIBBEAN INTERESTS

the building of a canal would have a great effect upon
her own advance and that the canal route might well
be considered her greatest single economic asset. But
so important a trade route was not merely a local affair,
it involved the interests of the world at large as well.
Colombian politics concerning Panama became, thus, an
object of interest of international, as well as local,
importance.

This fact became evident to a greater degree than
ever before with the changes in commercial and political
control at the beginning of the twentieth century. The
United States had come out of the war with Spain an
Asiatic, as well as an American, power. The naval
operations of that war had shown at what disadvantage
a country like our own works when its two coasts are
separated by thousands of miles of ocean. The Pacific
and Atlantic sections of our fleet were so far apart in
point of time that effective cooperation between the two
was impossible. Our foreign trade was rapidly grow-
ing, making our interest in the world's ocean-trade
routes greater. In the Caribbean itself the new polit-
ical interests which came to us on account of the changes
involved in the conflict with Spain and following that
struggle also contributed to our interest.

On January 20, 1902, Congress in response to the
popular interest in the canal projects authorized Presi-
dent Roosevelt to start the construction of the canal
at Panama if certain conditions were fulfilled. The
rights of the French company which had been unable
to complete the waterway were to be acquired and the
consent of Colombia to our undertaking the work was

THE PANAMA REVOLUTION 197

to be obtained. Unless satisfactory arrangements could
be made, the Government was to undertake the building
of a waterway by the Nicaraguan route.

It was ascertained that the rights of the French com-
pany could be purchased on satisfactory terms. To
secure the consent of Colombia, the Hay-IIerran treaty1
was negotiated providing for a cash payment of $10,-
000,000 and an annual payment of $250,000 as rental
as the price of the concession. The rental payments
were to begin nine years after the ratification of the
agreement. The United States Senate gave its appro-
val to the plan on March 17, 1903, but it was rejected
by the Colombian Senate on August 23, 1903. It was
intimated that they would ratify the agreement if the
payment were raised from $10,000,000 to $25,000,000,
but this change the United States would not accept.
Colombia was anxious to make the best bargain possible
in selling the canal route, a position which many re-
garded as indicative of a desire to "hold up" the United
States. On the refusal to pay the higher amount Co-
lombia retreated behind the excuse that the cession
involved could not be made "constitutionally," a claim
which was on its face a pretense, since for a higher
payment she had indicated she would make the transfer.

The effect of the Colombian rejection of the treaty
upon the representatives of the French canal company
and upon the people of Panama was unmistakable. The
French company saw that if the United States were

1 The text is in Diplomatic History of the Panama Canal, 63rd
Cong. 2d Sess. 1913-14, Senate Documents, Vol. 15, Appendix pp.
277-88.

198 CARIBBEAN INTERESTS

forced to adopt the Nicaragua route it would completely
destroy the value of their property at Panama. Even
delay in making- the arrangements might bring the same
result, for they were evidently unable to carry on the
work themselves and their concession was to lapse in
October, 1904.1 It seemed to them, therefore, that even
if the canal were ultimately to be built at Panama, any
long-drawn-out negotiations would bring the forfeit of
their rights to Colombia which would then exact from
the United States not only the payment mentioned in
her unratified treaty, but also a payment for the assets
of the French company which would have come into
her possession. Under such circumstances the agents of
the company became very active both on the Isthmus
and in New York in taking measures to secure a break
between the province of Panama and Colombia which
might turn events to the advantage of the concession-
aires.

To the Panamanians the result, if the canal project
fell through, would be not less serious. That there
could be two Isthmian canals was a possibility not to
be considered. If the United States went to Nicaragua
it would mean that Panama would be a languishing
province out of the course of world trade, whose trans-
Isthmian railroad, which had brought prosperity in the
past, would be allowed to rust to pieces or would keep
up a precarious existence on the profits of a small local
traffic. Their interests were, they felt, absolutely op-

1 The company claimed that it had an extension until 1910, but
its legality was under question. See Congressional Record, March
1, 1912, p. 2653, for discussion by Senator Hitchcock.

THE PANAMA REVOLUTION 199

posed to the action of the mother country. It seemed
to them that the mother country was trying to use their
resources as a means of income for the government of
Bogota rather than as a means of increasing local pros-
perity and making Panama a community which could
profit from the world's trade which would pass through
her ports.

The unity of interests and opinion between the great-
est economic investment in the province and the public,
so far as there can be said to have been a public with
a formulated opinion in the province, was bound to bring
an expression of dissatisfaction with the rejection of
the treaty. Their desires for a change in public policy
coincided further with those of the Administration in
Washington. Under such conditions, the outbreak of
a "revolution" was almost a certainty.1

President Roosevelt was greatly disappointed at the
action taken by Colombia and had prepared a rough
draft of a message advocating that since "the situation
had become intolerable, ... in pursuance of our duty
to ourselves as to the world we should begin the build-
ing of the canal" 2 in spite of Colombia's refusal to rat-
ify the treaty. But events were developing on the
Isthmus which indicated that no such announcement
would be necessary. Mr. Roosevelt thus describes the

1 The attitude and acts of the Washington Administration during
the latter half of 1903 are detailed in two messages of President
Roosevelt to Congress, of Dec. 7, 1903, and January 4, 1904. See
The Panama Canal, 63rd Cong. 2d Sess. Sen. Doc. Vol. 27, Doc.
471, for these and other documents on this subject.

2 Roosevelt, Theodore, How the United States Acquired the Right
to Dig the Panama Canal, Outlook, 99, pp. 314-18 (1911).

200 CARIBBEAN INTERESTS

situation: "The people of Panama now found them-
selves in a position in which their interests were iden-
tical with the interests of the United States. . . . There
was no need for any outsider to excite revolution in
Panama. There were dozens of leaders on the Isthmus
already doing their best to excite revolution. . . . Every
man who read the newspapers knew that with the failure
of Colombia to ratify the Hay-Herran Treaty revolu-
tionary attempts became imminent on the Isthmus. . . .
The papers published on the Isthmus themselves con-
tained statements that these revolutions were about to
occur. It appeared that . . . hundreds of stacks of
arms were being imported, that the government forces
in Panama and Colon were themselves friendly to the
revolution." 1 Army officers fresh from the Isthmus
gave confirmatory reports. They believed the uprising
would follow immediately on the adjournment of the
Colombian Congress, in October, without ratifying the
treaty. On the Isthmus it was believed that the revolt
would not come before October 20, because not until
then could sufficient arms and ammunition be secured.
Even this estimate, events proved, placed the date too
early.

Meanwhile, the conspirators in Panama were organ-
izing and their representatives in New York were feel-
ing out official and public opinion and planning the
moves to be taken when the "revolution" should actually
occur. The degree to which matters had been arranged
previous to the outbreak is shown in a letter by Dr.
Amador, later the first President of Panama, written to

rIbid., p. 317.

THE PANAMA REVOLUTION 201

his son on October 18, 1903, two weeks before the revo-
lution actually started, a portion of which runs as fol-
lows, "The plan seems to me good. A portion of the
Isthmus declares itself independent, and that portion
the United States will not allow any Colombian forces
to attack. . . . An assembly is called and this gives
authority to a minister to be appointed by the new gov-
ernment in order to make a treaty without need of rati-
fication by that assembly. The treaty being approved
by both parties, the new Republic remains under the
protection of the United States, and to it are added the
other districts of the Isthmus which do not already form
part of the new Republic and these also remain under
the protection of the United States. ... In thirty days
everything will be concluded." x How accurately the
conspirators were informed of the probable course of
events and how closely they were in touch with the
Washington Administration, the subsequent history of
the revolution proves.

Amador left for Colon shortly after writing the letter
quoted, whence he telegraphed to Bunau-Varilla, the
agent of the revolutionary junta in New York on Octo-
ber 29, "We have news of the arrival of Colombian
forces on the Atlantic side within five days. They are
more than 200 strong. Urge warships Colon." On the
following day the commander of the Nashville at Kings-
ton, Jamaica, received a secret cipher telegram from the
United States Government which read in part as fol-
lows : "Proceed at once to Colon. Telegraph in cipher

1 Extracts from the letter as published in Congressional Record,
March 1, 1912, p. 2654.

202 CARIBBEAN INTERESTS

the situation after consulting with the United States
consul." American warships had, in fact, been ordered
held in readiness to go to both the Atlantic and Pacific
sides of Panama from the day before Amador left New
York for Colon. On November 2, 1903, telegrams
were sent to the commanders of the Dixie and Nash-
ville on the Atlantic side with orders to give copies to
the commander of the forces on the Pacific side which
read in part: "Secret and confidential. . . . Maintain
free and uninterrupted transit. ... If interruption
threatened by armed force occupy the line of railroad.
Prevent landing of any force with hostile intent, either
government or insurgent either at Colon, Porto Bello
or other port. . . . Government force reported ap-
proaching the Isthmus in vessels. Prevent their land-
ing if in your judgment this would precipitate a con-
flict." 1 These orders for landing, President Roose-
velt declares, "were precisely such as had been issued
again and again in preceding years — 1900, 1901, and
1902, for instance" — under the provisions of our treaty
with Colombia by which we assumed certain duties in
maintaining order on the Isthmus.

The Nashville with American marines came to port
at 5 :30 P. M., on November 2. The Colombian troops,
five hundred strong, arrived and disembarked at Colon.
There was still no revolution. The Department of
State at Washington telegraphed on November 3, "Up-
rising on Isthmus reported. Keep Department
promptly and fully informed," to which the reply came

1 These telegrams are printed in Congressional Record, March
1, 1912, p. 2655.

THE PANAMA REVOLUTION 203

the same day, "No uprising yet. Reported will be in
the night. Situation is critical." Meanwhile, the com-
mander of the Colombian forces sought to obtain rail-
way passage for his troops across the Isthmus, but was
refused. He himself crossed to Panama to arrange mat-
ters but was thrown into jail. The second in command
then threatened to seize cars by force and cross. A
"reign of terror" and "killing all the American citizens
in Colon" are said to have been threatened. Marines
were landed from the United States vessels in the
harbor and order enforced. Subsequently, the com-
mander of the Nashville persuaded the leader of the
Colombian troops to reembark his forces and sail back
to Colombia.

While these events were going on, the bloodless revo-
lution of November 4 took place at Panama. Mr.
Roosevelt declared, "With absolute unanimity the peo-
ple of the isthmus declared themselves an independent
republic and offered immediately to conclude with our
government the treaty which Colombia had rejected,
and to make its terms more favorable to the United
States. . . . We recognized the Republic of Panama.
Without firing a shot we prevented a civil war." x

Whether Colombia could have reconquered her un-
willing province must always remain a matter of doubt.
That any attempt to do so would have resulted in a
bloody conflict in which both local and foreign interests
would have suffered severely is unquestioned. The at-
tempt, if successful, would have reestablished, Mr.

1 Roosevelt, Theodore, How the United States Acquired the Right
to Dig the Panama Canal, Outlook, 99, p. 317 (1.011).

204, CARIBBEAN INTERESTS

Roosevelt asserts, "the anarchic despotism of the preced-
ing fifty years — inefficient, bloody and corrupt. The
other course was to let our foes pay the penalty of their
own folly and iniquity and to stand by our friends. . . •
Of course we adopted the latter alternative." x

The revolution accomplished, the formal arrange-
ments for the support of the United States were rap-
idly pushed through. The independence of Panama
was recognized on November 13, 1903. The treaty with
the United States was concluded November 18, 1903,
by Philippe Bunau-Varilla for Panama and Secretary
of State John Hay for the United States. Its chief
provisions are : The United States guarantees the inde-
pendence of Panama and agrees to pay $10,000,000
in gold on exchange of ratifications and to make an
annual payment of $250,000 in gold during the life of
the treaty, the first payment to be made nine years
after the date of ratification. In return, Panama
"grants to the United States in perpetuity the use, occu-
pation and control of a zone" ten miles wide on which
the canal is to be built. In this territory the United
States has the powers it "would possess and exercise
if it were the sovereign of the territory." In addition,
the United States may assume control of other territory
convenient for the purposes of the canal.2

1 Ibid.

2 Text is in Malloy, W. M. Treaties, Conventions, International
Acts, Protocols and Agreements between the United States and
Other Powers, Washington, 1910, Vol. II, p. 1349, et seq. The
agreement was ratified by the Senate of the United States, February
23, 1904.

THE PANAMA REVOLUTION 205

Panamanian politics have been uneventful since the
revolution and the recognition of independence. The
payments made under the treaty by the United States
have minimized the importance of that element so
troublesome throughout Central America — the problem
of public finance. The elections are orderly. The
United States has been asked by both parties on occasion
to "supervise" the balloting to prevent possible contro-
versy. The small area in which a large proportion of
the population lives and the closeness of connection be-
tween the canal management and local governmental
developments assure that public order will seldom be
seriously disturbed and that the government will in all
probability not be confronted by serious problems fol-
lowing bad management of public affairs.

Commercially, Panama shows the same characteristics
as her neighbors to the north so far as the trade of the
native population is concerned. Her imports for these
people are of the basic foodstuffs and the manufactures
used by a people of a low standard of life. In addition,
however, there is a large commerce due to the transit
trade and to the construction work done on the Panama
Canal. This trade goes chiefly to the United States. In
the twelve months ending December, 1915, exports from
the Republic to the United States were valued at $4,-
655,736. Imports reached $20,985,896, a figure less
than that of previous years,1 due to the completion of
the greater part of the work on the Canal with a conse-
quent withdrawal of the working force. Even exclud-

1 Monthly Summary of Foreign Commerce of the United States,
December, 1915, p. 56.

206 CARIBBEAN INTERESTS

ing the Canal Zone trade, about eighty-five per cent, of
the exports go to the United States and about fifty per
cent, of the imports come thence. This foreign trade,
exclusive of that with the Canal Zone, is valued at about
$12,000,000 yearly.1

II. THE PANAMA TOLLS

It has already been pointed out that Panama is a
republic, the position of which is of more than usual
importance to other nations of the world. The comple-
tion of the canal has brought this fact vividly to atten-
tion in the so-called "tolls controversy." This is not
strictly a Panamanian problem, since after the treaty
with the United States Panama has no control over
the problems which involve the canal and its operation.
It is one of the most important political questions which
have recently arisen concerning the Isthmus. What are
the rights of Great Britain and the United States is
determined by the treaty relations between these two
powers, not by any agreement to which Panama is a
party. To be sure, Article 18 of the Hay-Bunau-
Varilla treaty provides that the canal shall be opened
on the terms of the Hay-Pauncefote treaty of 1901 be-
tween Great Britain and the United States, but it does
not attempt to construe the rights outlined in the latter
convention.

The history of Anglo-American relations as to
Isthmian Canals is long. It turns chiefly about two

1 Statistical Abstract of the United States, 191Jf, Washington,
1915, p. 688.

THE PANAMA REVOLUTION 207

treaties, the Clayton-Bulwer treaty of 1850 and the
Hay-Pauncefote treaty of 1901. The former was nego-
tiated at a time when the United States was looking
with anxiety at the growing influence of Great Britain
in Central America. By it Great Britain and the United
States entered into an agreement to abstain from efforts
to secure exclusive control for the purpose of building
a canal, over any part of Central America. The citi-
zens of each were to enjoy on any canal which might
be built the privileges enjoyed by the citizens of the
other. In any other trans-Isthmian communication
also they sought to "establish a general principle" of
neutralization. Article 8 declares "the same canals or
railways being open to the subjects and citizens of
Great Britain and the United States on equal terms,
shall also be open on like terms to the subjects and citi-
zens of every other state which is willing to grant
thereto such protection as Great Britain and the United
States engage to afford."

The proposed canal was to be built by private enter-
prise, neither state was to seek to control the route, the
adhesion of other states was to be invited and equality of
treatment secured for the citizens of all countries. This
treaty was replaced by the Hay-Pauncefote treaty in
1901. By that time the possibility of the construction
of the canal by a private company had become remote
and the United States Government sought to obtain a
new agreement by which it might itself undertake the
work. The new instrument is not without ambiguous
clauses and these have given rise to the disagreement
between American and English official opinion.

208 CARIBBEAN INTERESTS

The chief provisions of the Hay-Pauncefote treaty,
so far as they involve the question of tolls, may be sum-
marized as follows : *

The new treaty supersedes the Clayton-Bulwer
agreement and allows the United States to construct
the canal directly or by means of private companies
working" under its auspices. The United States adopts
as the basis of neutralization of the Panama Canal cer-
tain rules which apply to the management of the Suez
canal, the first of which reads,

"1. The canal shall be free and open to the vessels of com-
merce and of war of all nations observing these Rules, on terms
of entire equality, so that there shall be no discrimination against
any such nation or its citizens or subjects, in respect of the con-
ditions or charges of traffic, or otherwise. Such conditions and
charges of traffic shall be just and equitable."

Article 4 provides that "no change of territorial sov-
ereignty or of international relations of the country or
countries traversed . . . shall affect the general prin-
ciple of neutralization. . . ." In contrast to the Clay-
ton-Bulwer agreement, it is to be noted that the canal
which is in the minds of the negotiators of the Hay-
Pauncefote treaty is no longer a private enterprise to
which the governments propose to give their support,
but one either owned by or constructed under the
auspices of one of the parties. The adhesion of other
states to the treaty is not invited; this is purely a uni-
lateral agreement and the United States, not the United
States and Great Britain, adopts as one of the bases of

1 For text see Malloy, W. M., Treaties, Conventions, International
Acts, Protocols and Agreements between the United States of
America and other Powers, Washington, 1910. Vol. I, p. 782.

THE PANAMA REVOLUTION 209

neutralization an equality of charges for the traffic of all
nations. It is provided that the United States shall
adopt the rule that the canal shall not be blockaded,
and that it will keep the canal open "to the vessels of
commerce and of war of all nations observing these
rules, on terms of entire equality ... in respect of the
conditions or charges of traffic."

Occasion for the construction of the terms of this
treaty as to the tolls to be charged did not arise until
about ten years after its adoption. So far as opinion
in the United States can be judged by the expressions
used in the party platforms there seems to have been
no doubt as to what was considered to be the degree of
freedom of action which was believed to have been re-
tained by the United States, at least as to the coastwise
trade.1 The Democratic platform declared, "We favor
the exemption from tolls of American ships engaged in
coastwise trade passing through the Panama Canal."
The Progressive party said the same thing: "We de-
mand . . . that American ships engaged in the coast-
wise trade shall pay no tolls" for passing through the
canal. The Republicans made no statement. They
had by their action in Congress shown the same opinion
and by their votes the principle became a law.

As the time approached when the canal would be
opened to traffic it became necessary to provide the rules
under which the property should be operated. On Au-

1 For expressions of opinion in the Congressional hearings see
The Panama Canal, Hearings before the Committee on Interstate
and Foreign Commerce. 62d Cong., 2d Sess., House Doc. 680
(1912).

210 CARIBBEAN INTERESTS

gust 24, before the election of 1912, the Panama Canal
Act was approved. It provided for the permanent gov-
ernment of the Canal Zone and contained certain clauses
which referred to the charges to be made on canal
traffic. On December 9, the British Government
through Ambassador Br}7ce, filed a protest on the
ground that certain provisions of the Act contravened
the Hay-Pauncefote treaty. Arbitration of the misun-
derstanding was suggested. The chief objections made
by the British Government to the proposed rules were
( 1 ) that no tolls were to be levied on the coastwise trade
of the United States, (2) that the President was author-
ized to prescribe tolls for ships belonging to the United
States or its citizens different from those on other ships,
and (3) that exemptions were made in favor of the ships
of Panama. Secretary of State Knox in a letter to our
charge d'affaires at London on January 17, 1913,
pointed out the following facts: The last mentioned
provision was inserted in conformity with the treaty
with Panama ratified in 1904, to which Great Britain
had before this time raised no objections, and a similar
provision inserted in the proposed treaty of 1903 with
Colombia had called forth no comment. As to the sec-
ond point, Mr. Knox asserted that the President's proc-
lamation had not, in fact, discriminated in favor of
American vessels in the foreign trade and that, there-
fore, no real grievance had yet arisen which could be
arbitrated.

The question of greatest importance involved the ex-
emption of coastwise traffic from the payment of tolls.
Sir Edward Grey contended that the coastwise trade

THE PANAMA REVOLUTION 211

might cover a part of foreign trade if goods were landed
at an American port and then reloaded on an American
vessel to be forwarded as a part of the coastwise trade.
A ship of the United States also might combine foreign
and coastwise trade and thus get the advantage of toll
exemption. To this Mr. Knox replied that the objec-
tions here again referred to possible damages, not to any
which had arisen. Therefore, in his opinion, the re-
quest for arbitration was premature. As to a further
objection — that the law might allow the fixing of rates
which were not just and equitable — Mr. Knox held that
the remission of tolls should be considered as a subsidy
of our shipping to the extent of the remitted charges
and not as a discrimination against foreign shipping.
The justice of the tolls on British ships was to be meas-
ured by the fair value of the service rendered, not by
the tolls charged on United States coastwise traffic. "It
is the improper exercise of a power and not its posses-
sion which alone can give rise to an international cause
of action. . . ." *

The question of the tolls legally chargeable under the
Hay-Pauncefote treaty remained a matter of disagree-
ment through the remainder of the Administration of
President Taft and was passed on to his successor. In
support of the contention that the United States may
make certain discriminations in toll charges, the follow-

1 The treaties, the Panama Canal Act, the British protest, the
reply by Secretary Knox, the Proclamation of President Taft as to
the tolls to be charged and other documents on the subject of the
tolls controversy, are reprinted in Congressional Record, April 21,
1913, pp. 212-63. See also Diplomatic History of the Panama
Canal, 63d Cong., 2d Sess., 1913-14. Senate Documents, Vol. 15.

212 CARIBBEAN INTERESTS

ing points were urged in current argument on the sub-
ject:

1. The explicit language establishing Great Britain and the
United States on entire equality of treatment, found in the Clayton-
Bulwer treaty, does not appear in the Hay-Pauncefote treaty.

2. The "general principle of neutralization/' which the Hay-
Pauncefote treaty speaks of, means immunity from attack and does
not refer to traffic conditions. The neutrality stipulated for in the
treaty is guaranteed only by the United States; the joint guaranty
of the previous convention does not appear.

3. The stipulation that the "canal shall be free and open to ves-
sels of commerce and war of all nations" "on terms of entire equal-
ity" does not include the vessels of the United States. If it did, it
would mean that the vessels of the United States could be granted
no favors in the canal, in dry-docking, pilotage, coaling or any
other way. To be sure, the British objection refers now only to
toll exemption, but if it rightly applies to that subject it would
apply to all others. If "equality" is demanded we should have no
right to fortify the canal, a right Great Britain has admitted we
possess, and our warships could not in time of war repair or re-
victual in the canal. Viewed in the light of circumstances surround-
ing the negotiation of the treaty, the rule of equality is equivalent
only to the guaranty of "most favored nation" treatment. British
vessels would not be discriminated against as compared to other
foreign vessels.

4. The equality of the ships of all nations does not prevent spe-
cial rules for countries standing in a peculiar geographical or his-
torical relation to the canal. Hence, the grant of rights to Panama
does not infringe the treaty with Great Britain.1

5. The equality stipulated for could not have been intended to
mean absolute equality between the vessels of Great Britain and
the United States. Those who used the language did not have
in mind the coasting trade which has always been given special

1 These points are made in House Documents, Vol. 134, No. 1313,
62d Cong., 3d Sesssion (1913), an article prepared by the law
officer of the Isthmian Canal Commission, Mr. Feuille, regarding
tolls in the Panama canal.

THE PANAMA REVOLUTION 213

treatment. Thus we have a treaty with Great Britain which pro-
vides "That no higher or other duties or charges shall be imposed
... in the ports of any of his Britannic Majesty's territories in
Europe on the vessels of the United States than shall be payable in
the same ports on British vessels"; still this language is held not
to prevent Great Britain from granting special favors to her coast-
ing trade.1

6. It can even be asserted that the Panama revolution so changed
conditions that we are no longer bound by the Hay-Pauncefote
treaty. To be sure, the treaty stipulates that no change of sov-
ereignty in the territory shall modify the duties of the parties, but
this clause was inserted to apply to the possibility that some third
party might become its possessor and had no reference to the pos-
sible acquisition of the zone by the United States itself.2

Against freedom of action for the United States, it
is urged:

1. The Clayton-Bulwer treaty Great Britain allowed to be su-
perseded by the Hay-Pauncefote convention as a favor to us in
return for which she was to enjoy the same privileges in the canal
to be built as we would enjoy.

2. The words "all nations" are not susceptible of being inter-
preted "all nations except the United States."

3. Equality of treatment is not given when the ships of one
nation pass toll free and the ships of another pay.

4. The provision that no change of sovereignty shall affect the
obligations of the parties is general and applies to the present case
as much as if some third party had become the owner of the
Isthmus.

1 HereshofF-Bartlett, C. A., article reprinted in Congressional
Record, Jan. 22, 1913, p. 1872, et seq.

2 Seabury, Samuel, The Panama Canal — Shall It Be American or
Anglo-American? Outlook, March 8, 1913; also Taylor, Hannis,
Rule of Treaty Construction, Sen. Doc, Vol. 20, No. 31, 63d Cong.,
1st Sess. (1913). Executive documents relating to the treaties are
printed in Canal Treaties, 63d Cong., 2d Sess., Sen. Doc, Vol. 27 ' ,
No. 456 (1914>.

214 CARIBBEAN INTERESTS

The incoming of the Wilson Administration brought
a shift from the first line of argument under which
President Taft had been willing to have the matter go
to arbitration to the second process of reasoning. Presi-
dent Wilson came to believe that not only had we agreed
to give British ships identical treatment with our own
in matters of tolls, but that the proper action for us to
take was not to refer the matter to an arbitration court
but to repeal the tolls-exemption provision of the Pan-
ama Canal Act of August 24, 1912. The Democrats in
the latter part of President Taft's Administration had
been in favor of merely suspending the tolls provision
without repealing it, thus disarming the British pro-
test, but President Wilson was opposed to the compro-
mise. He declared in his message of March 5, "The
large thing to do is the only thing we can afford to
do, a voluntary withdrawal from a position everywhere
questioned and misunderstood. ... I ask this of you in
support of the foreign policy of the Administration. I
shall not know how to deal with matters of even greater
delicacy and nearer consequence if you do not grant it
to me in ungrudging measure." 1

Besides its bearing on our relations with other coun-
tries, President Wilson advocated the repeal on the
ground that it involved an unwise domestic policy.
Many had already argued this point. It was urged
that the exemption would work out not as a stimulus
to independent steamship lines to enter the coastwise
trade, but as a veiled subsidy to the shipping trust.
When the bill for repeal came up in Congress, there-

1 The American Year Book, 1914, p. 24.

THE PANAMA REVOLUTION 215

fore, it no longer stood as a measure on which action
was to be taken with a consideration only of our duties
under our treaty with Great Britain, but our general
diplomatic position was involved and its merits as a
domestic measure were questioned.

After a long contest in Congress in which some
Democrats refused to support the President because
they believed in the programme advocated by the previ-
ous Administration, and some protested against the re-
peal as the breaking of a platform pledge, the measure
passed and received the approval of the President on
June 15, 1914. Before it took its final form the Senate
incorporated an amendment which declared "the pas-
sage of this act shall not be construed or held as a waiver
or relinquishment of any right the United States may
have under the treaty with Great Britain ... or the
treaty with the Republic of Panama ... to discrimi-
nate in favor of its vessels by exempting the vessels of
the United States or its citizens from the payment of
tolls for passage through said canal. . . ." 1

The terms of this amendment are significant. Of
course, any standard adopted by Congress for charging
tolls cannot be taken as a measure of our rights under
the treaty with Great Britain. The amendment intro-
duced by the Senate indicates a desire on the part of
the United States that the law should not be considered
as involving any modification of these rights. What
our rights and obligations on this point are, remains,
therefore, an open question. The point has never been

1 Statutes of the United States of America, 1913-14, p. 385-6.
Chap. 106 approved Aug. 24, 1912.

216 CARIBBEAN INTERESTS

arbitrated and no British interests were adversely af-
fected before the repeal of the law. It is still possible
that the question will be raised in connection with the
rights granted to vessels of Panama in our treaty with
that country approved in 1904.

CHAPTER XII

THE FORTIFICATION OF THE PANAMA CANAL

Panama is the center of our naval policy in the Car-
ibbean. During the years immediately following the
Civil War the propaganda for greater influence in the
West Indies was kept alive by the memory of the
limitations under which our Navy worked during that
conflict. After the Spanish- American War the plans
for coaling stations were fostered largely by the real-
ization of the new responsibilities undertaken in Porto
Rico and Cuba. With the building of the Panama
Canal, the continued growth of our Navy and a
better realization of our position as a world power has
come a still wider horizon. Our international political
interests no longer only draw us toward the Caribbean
but radiate from it. The naval and military policy
adopted there, and especially at Panama, are therefore
not of local but of world-wide significance. The impor-
tant question as to what that policy should be did not
fail to produce a marked division of public opinion,
based partly on different views as to the extent of our
international obligations, partly on disagreement as to
the best national policy. The first point is now defi-
nitely settled and the Government has given its decision
on the second.

What are our rights, in view of our international

217

218 CARIBBEAN INTERESTS

engagements, is determinable by a review of the treaties
concerning Panama to which we have been party. The
first important one touching the matter was the Clay-
ton-Bulwer treaty of 1850. The circumstances under
which the treaty was made were peculiar. President
Monroe in his message to Congress in 1823 had given
announcement to what, we have since come to call the
Monroe Doctrine, declaring that the Americas were
no longer to be considered territory in which European
powers were free to establish colonies. Great Britain
had acquired indefinite rights in Central America, and
in British Honduras, and claimed to be the protector of
the Mosquito Indians in territory lying back of Grey-
town, Nicaragua. Both Great Britain and the United
States were interested in the establishment of a trans-
Isthmian canal at the time, chiefly for its commercial
advantages, and each was unwilling to see such an en-
terprise fall under the exclusive control of the other.
The route then generally considered most feasible lay
through Nicaragua and would have affected the alleged
rights of Great Britain in the Mosquito territory. In
this situation, the Clayton-Bulwer treaty was proposed
and adopted as a compromise whereby the possibilities
of conflict of interests might be avoided.

The treaty bound each party not to "obtain or main-
tain for itself any exclusive control over the said ship
canal; agreeing that neither will ever erect or maintain
any fortifications commanding the same, or in the
vicinity thereof, or occupy, or fortify, or colonize, or
assume or exercise any dominion over Nicaragua, Costa
Rica, the Mosquito coast, or any part of Central Amer-

THE PANAMA CANAL 219

ica; nor will either make use of any protection which
either affords or may afford, or any alliance which
either has or may have to or with any state or people
for the purpose of erecting or maintaining any such
fortifications. . . ." The subjects of both were to en-
joy the same privileges in the use of the canal, which
was to remain open in case of war. They were jointly
to guarantee its neutrality and to invite other states to
cooperate in adopting the policy outlined.1

This convention was received with little criticism in
the United States until after the Civil War, when the
military possibilities of the canal came to be more clearly
realized and its terms no longer coincided with Ameri-
can national policy. There were numerous attempts to
secure its modification or abrogation, but it continued
as one of our international engagements for half a
century.

The Spanish-American War brought still more
clearly before the American people the great military
advantage which might be reaped by them from the
establishment of an easy communication by water be-
tween the Atlantic and Pacific. By this time, too, it
had become evident that the private enterprise which
had undertaken to build a canal at Panama was doomed
to failure. Negotiations were undertaken with Great
Britain looking to the supplanting of the Clayton-Bul-
wer agreement.

The result was the first Hay-Pauncefote treaty, con-

1 Malloy, W. M. Treaties, Conventions, International Acts, Pro-
tocols and Agreements between the United States and other Pow-
ers, Washington, 1910, Vol. 1, pp. 659-63.

220 CARIBBEAN INTERESTS

eluded February 5, 1900, which freed the United States
from the promise not to seek control over the canal and
left the Government free, should it so decide, to con-
struct the work itself. The canal was to be neutral, and
open to all nations; the United States was forbidden
to erect fortifications and other nations were to be in-
vited to adhere to the treaty. This agreement was not
acceptable to the American Senate. Later, on No-
vember 18, 1901, a second proposal was made which
eliminated the clauses objectionable to our Govern-
ment. The United States was given the "exclusive
right of providing for the regulation and management
of the canal." The guaranty of neutrality was now a
unilateral one undertaken by our Government alone,
there was no suggestion of a restriction on the right
of colonization anywhere and the provisions concern-
ing fortification were dropped. After asserting that
the canal should never be blockaded, one clause de-
clared: "The United States, however, shall be at
liberty to maintain such military police along the
canal as may be necessary to protect it against
lawlessness." This is the only clause referring to the
use of armed force by the United States.1 In its
amended form the treaty was accepted by both Gov-
ernments.

One other treaty — the one concluded with Panama
exactly two years after the Hay-Pauncefote agree-
ment— November 18, 1903, has a minor bearing on
the fortification question. Article XXIII reads partly
as follows : "If it should become necessary at any time

1 Text in Malloy, op. cit. Vol. 1, p. 782.

THE PANAMA CANAL 221

to employ armed forces for the safety or protection of
the canal, . . . the United States shall have the right,
at all times and in its discretion, to use its police and
its land and naval forces or to establish fortifications
for these purposes." *

With these treaty provisions in mind we are now in
a position to judge what right the United States has
to fortify the canal. It is evident that the Clayton-
Bulwer treaty, the so-called first Hay-Pauncefote
treaty, and the one which finally received approval rep-
resent a gradual abandonment of limitations on the
freedom of action of the United States. What limi-
tations still remained became a matter which divided
public opinion as the work of constructing the canal
approached its end and the question of the defense of
the waterway was urged to attention.

The radical view in favor of fortification was rep-
resented by ex-President Roosevelt and ex-President
Taft. Mr. Roosevelt, it is asserted, had asked Mr.
Hay at the time when the second proposal for a treaty
with Great Britain was under consideration whether
the dropping of the prohibition against fortification
meant what it intimated — that the United States was
to be left free to fortify if it wished. He received an
affirmative reply, which was one of the elements de-
ciding him to forward the treaty to the Senate for its
approval. President Taft declared, in 1910, that he
was in 'favor of fortification and had been from the
time he was Secretary of War. Colonel Goethals, in
charge of the construction of the waterway, and Gen-

1 Text in Malloy, op. cit. Vol. 2, p. 1348.

222 CARIBBEAN INTERESTS

eral Leonard Wood, Chief of Staff, were among the
other prominent men who believed we had the right to
fortify and should do so.1 Among those who believed
that such action would be contrary to the spirit, if not
the letter, of our treaty obligations were Congressman
James A. Tawney, long Chairman of the Committee
on Appropriations in the House of Representatives,
and David J. Foster, Chairman of the Committee on
Foreign Affairs, in the same body. The question has
now become academic. The British Government has
recognized that the United States is free to use the
canal as a military asset. Sir Edward Grey in a note
to Secretary of State Knox, dated November 14, 1912,
declared in discussing the terms of the Canal treaties,
"Now that the United States has become the practical
sovereign of the canal, His Majesty's Government do
not question its title to exercise belligerent rights for
its protection." 2

The question of the best policy for the United States
to follow is, however, not decided by the determination
of the degree of freedom of action open to us. A large
part of the American public believed, and still believes,
that even if we are within our rights in fortifying the
canal such action is inadvisable. The arguments may
be summarized as follows.

Against fortification it is argued:

1 Outlook, 96, p. 256-8 (1910). See also Mahan, A. T. Fortify
the Canal, North American Reviexv, 193, pp. 331-39 (1911).

2 The Secretary of State for Foreign Affairs of Great Britain to
Ambassador Bryce, November 14, 1912, published in Congressional
Record, April 21, 1913, p. 255.

THE PANAMA CANAL 223

1. To put forts on the canal is only another step forwarding the
campaign to make the United States a militaristic nation. Each
step forward necessitates another one. Thus, for example, we
annex Hawaii because the islands are needed as a naval base, then
we must have a larger navy to protect Hawaii, then we must
fortify Hawaii so that it may help the navy; we must build the
canal to give the navy greater mobility, then we must have a big-
ger navy in order to protect the canal and then the canal must be
fortified to give the navy greater mobility. Once started on this
line, a plausible argument can always be presented for the next
step.

2. To fortify the canal is an act of "mad militarism" which will
make it a "magnet for attack." We would "forfeit thereby the
cooperation of all the nations making use of the canal" and make
it "our most valuable and vulnerable possession." x If we ask all
the great nations to neutralize it then in time of war no nation
would dare attack it since it would thereby attack all the world.
The mutual advantages of all neutral powers in keeping the canal
open would deter even the most irresponsible nation from violating
its neutrality.

3. Even if we did fortify that would not assure the safety of
the waterway for our vessels. The late Rear-Admiral R. D. Evans
is quoted as saying that the forts alone could not protect the canal.
Without a fleet to protect the terminals of the canal during its transit
by war vessels, a hostile force could stand off shore and concentrate
its fire on each ship as it emerged, thus destroying piecemeal any
force which attempted to pass from ocean to ocean. Without back-
ing by the fleet, therefore, the forts cannot protect the canal, but
if the fleet is present to protect the canal mouth then the forts are
unnecessary. Since the canal must be protected from the sea in
order that it may "be the 'military asset' which some of our mili-
tary experts say it should be, it is absolutely necessary that with our
fleet we should control the Caribbean Sea and so the Atlantic ap-
proach to the canal. Under existing conditions with a proper coal-
ing station at Guantanamo or at some other convenient place, our
warships afford us a control over the Atlantic entrance adequate and

1 Tawney, J. A. The Folly of Fortifying the Canal, Independ-
ent, 71, pp. 125-8 (1911).

224 CARIBBEAN INTERESTS

complete." Pearl Harbor, it is argued, gives a similar protection
to the Pacific entrance.1

4. The cost of installing fortifications and of their maintenance
would be heavy. Various estimates have put construction as high
as $50,000,000, and maintenance, including the cost of garrisoning
the forts, would bring an annual charge of at least ten per cent, of
the initial outlay. General Leonard Wood is given as authority
for the statement that a garrison of 7,000 men would cost $8,400,-
000 annually.2 Already the bond issue for the canal has put upon
posterity a burden of $400,000,000. Fortification would add an-
other serious permanent expense.

5. To fortify the canal would be an act in contradiction to the
best developments in international affairs. The progress of the
arbitration movement is minimizing the chances of armed conflict.
To neutralize the canal and leave it unfortified would be the most
important contribution the United States could make to advance
the cause of pacifism and the best evidence that its own profes-
sions of peaceful intent are not empty words.

In favor of fortification were urged arguments more
nationalistic in tone :

1. The canal can be made a most important means of defending
our national policies only if it is fortified. Ex-President Roose-
velt expressed this idea at Omaha in 1910:

"We are in honor bound to fortify it ourselves, and only by so
doing can we effectively guarantee that it shall not be used against
us. The chief material advantage — certainly one of the chief ma-
terial advantages — which we shall gain by its construction, is the
way in which it will, for defensive purposes, double the power of
the United States Navy. To refuse to fortify it . . . would be to
incur, and quite rightfully, the contempt of the world; it would

1 Foster, D. J. Neutralize the Panama Canal, Independent, 68,
pp. 1320-2 (1910).

2 Tawney, J. A. The Folly of Fortifying the Canal, Independ-
ent, 71, pp. 125-8 (1911)- See also Olney, R., Fortification of
the Panama Canal, Amer. Jour, of Int. Law, Vol. 5, pp. 298-301
(1911).

THE PANAMA CANAL 225

mean the complete abandonment of the Monroe Doctrine ... it
would be in its essence treason to the destiny of the republic." 1

2. The canal should be made as great a military asset as pos-
sible for us. Under present international conditions, it is not to
be expected that so important a prize, if undefended, would remain
free from attack if we were engaged in war. A successful attack
would either leave our fleet divided to be destroyed piecemeal, or,
if the fleet were united, leave one coast defenseless. It is argued
that adequate defenses would enable the canal to defend itself, that
ships could debouch at either end under cover, assume battle forma-
tion and engage the enemy. The locks and dams lie in the inte-
rior too far for the guns of the enemy to reach when defended by
the forts. Under these conditions, fortifications will insure that
the Navy can use the canal even in the presence of the enemy and
protect it from damage in the Navy's absence.

Our obligations as to the use of the canal by other nations are
only to allow its use by belligerents impartially when we are our-
selves not a party to the war. In the words of General Leonard
Wood, "We shall build the canal and maintain it for the use of all
countries in time of peace and control it in time of war as our in-
terests demand." 2 An unfortified canal would necessitate that the
Navy stay in its vicinity to defend it, thus destroying mobility and
making it impossible for our warships to take the offensive. If
there were no forts at the canal the enemy could draw off the Navy
by a feint attack on the coast and then raid the canal, or it could
make a feint at the canal and attack the coast. The rules of in-
ternational law which prevent the bombardment of unfortified
places have not been so uniformly observed in recent history as to
justify the belief that an unfortified canal would be safe from
enemy attack. The temptation would be too great. The enemy
would destroy it, thus putting upon us the necessity of spending
much more than the cost of fortification in its subsequent repair
or he would take possession and at the end of the war, if success-
ful, hold it for indemnity.

3. The objection that the canal, even if fortified, could not be

1 Independent, 69, pp. 549-50 (1910).

2 Quoted by Tawney, J. A., in The Folly of Fortifying the Canal,
Independent, 71, pp. 125-8.

226 CARIBBEAN INTERESTS

protected from raiding parties landing out of range of the guns
to attack it in the interior, is a strong one. Nor could it be surely
protected against attack by aeroplanes and airships, but the Gov-
ernment would, of course, take all possible precaution to prevent
such attacks, and it could do so much more effectively if the canal
were fortified than if it were not.

4. Finally, the strongest argument for fortification is that, even
granting that by some mishap or by development of new war means,
we were not ourselves able to keep its beneficial use in war time, its
fortification would at least assure that the waterway should not
be used against us. If we cannot double the strength of our fleet
in war time by its use, we can by fortifying at least assure that the
enemy shall not be able to turn its possession to his profit.

The War Department has consistently favored for-
tification. In 1911, the Secretary of War, in his An-
nual Report, called attention to the question of forti-
fications at Panama as follows:

"The exits and locks of the Panama Canal must now
be protected, and it has become necessary to send a
mobile force of at least a brigade to the Isthmus of
Panama as well as coast artillerymen for this purpose.
This not only gives protective insurance, but turns the
Navy free for its legitimate functions." 1

In the same year, Major General Leonard Wood
reported the garrison necessary. He declared: "The
work on the Panama Canal has now reached a point
where it is most necessary to provide a garrison ade-
quate for its protection and to insure the neutrality of
the Canal. Twelve companies of Coast Artillery troops,
four regiments of Infantry at full strength, one bat-
talion of Field Artillery, one squadron of Cavalry, and

1 Report of the Secretary of War, Henry L. Stimson, in War De-
partment Annual Reports, 1911, Vol. 1, p. 15.

THE PANAMA CANAL 227

certain auxiliary troops constitute the force considered
necessary by the undersigned for these defenses." x
Congress appropriated $3,000,000 for the beginning of
the work which has proceeded continuously since. By
the next year, 1912, excavation work was well advanced
and construction of gun and mortar batteries was be-
gun.2

During 1913, the detailed surveys for location of the
land defenses were undertaken and the Chief of Ord-
nance reported: "The issues of 14-inch guns on dis-
appearing carriages, 12-inch mortars and carriages of
the latest type, and 6-inch guns on disappearing car-
riages will begin shortly for the coast defenses of the
Panama Canal." 3 In 1914, the fortifications were re-
ported as nearing completion 4 and manning in process.
The chief of the Coast Artillery reported: "The forti-
fications at the Atlantic and Pacific ends of the Panama
Canal are practically completed, and it has been neces-
sary to send Coast Artillery troops from the United
States to the Canal Zone to man them. Six companies
have already been ordered there, and it will be necessary
to send six other companies during the next few
months from the fortifications of the United States." 5

1 Report of Major General Leonard Wood, Chief of Staff, in War
Department Annual Reports, 1911, Vol. 1, p. 146.

2 Report of the Secretary of War, Henry L. Stimson, in War De-
partment Annual Reports, 1912, Vol. 1, p. 56.

3 In report of Chief of Ordnance, Brigadier-General William
Crozier, in War Department Annual Reports, 1913, Vol. 1, p. 723.

4 Ibid., p. 479.

5 Report of Chief of Coast Artillery, C. P. Townsley, in War De-
partment Annual Reports, 1914, Vol. 1, p. 561.

228 CARIBBEAN INTERESTS

The completion of the fortifications is the last step
taken to insure that those who built the canal shall be
secure in its control. The military advantages which
we have hoped to gain and the force necessary to make
them secure are thus stated by former Secretary of
War Henry L. Stimson.

"By the control of this highway between the two
oceans the effectiveness of our fleet and our general
military power will be enormously increased. It is
therefore obvious that the unquestioned security of the
canal is our most important military problem. The
permanent garrison must be strong enough to guard
the locks and other important works and to prevent a
naval attack which, under modern conditions, may even
precede a declaration of war. We must, therefore, be
able, even in peace, to man the seacoast guns that cover
the approach to the canal, and we must have enough
mobile troops to protect the rear of the forts and to
defeat naval raids. A modern fleet can land a raiding
party of several thousand bluejackets, and such a force
landing out of range of the seacoast guns could pene-
trate to some vulnerable part of the canal within a
few hours. The permanent garrison must therefore
include a mobile force strong enough to anticipate and
defeat naval raids at the beginning of hostilities, and
to secure the canal until reinforcements can be ex-
pected from the United States." 1

1 In Appendix A to Report of Secretary of War, H. L. Stimson,
in War Department Annual Reports, 1912, Vol. 1, p. 73.

CHAPTER XIII

OUR RELATIONS WITH THE NORTHERN REPUBLICS
OF SOUTH AMERICA

COLOMBIA

I. Political

The relations of the United States with Colombia and
Venezuela, the two republics of northern South Amer-
ica, are important not only because of the size of our
interests, present and prospective, within their borders,
but because they illustrate the trying situations which
are apt to thrust themselves more and more upon our
attention as better transportation facilities and increased
international commerce bring the countries of the world
into closer contact.

The coasts of these republics were skirted by the
early Spanish voyages of discovery and have had in
point of time a long contact with European civilization.
But this connection has not brought with it large num-
bers of European colonists, and even at the present
time the color of the population is still largely other
than white.1 Near to the West Indies, both Venezuela
and Colombia bear traces of the African slave trade
which formerly furnished the main supply of labor. In
Colombia, for example, in 1915 the population was

1 Bigelow, John, American Policy, New York, 1914, p. 7.

229

230 CARIBBEAN INTERESTS

reported to have been 50 per cent, white, 35 per cent,
black and 15 per cent. Indian.1 In the coast towns
there is a considerable mixture of negroes with the In-
dian stock, the product being known as "zambos."

Lying as they do in the full tropics, where nature de-
mands the expenditure of but little energy to assure
the minimum of subsistence, and peopled largely by a
race satisfied with a low standard of life, these coun-
tries have up to the present time felt only slightly the
influences which have spurred on the people of other
lands to a full utilization of the natural resources within
their reach. The isolation of these countries from the
outside world has not meant freedom from internal
strife. Some of the most sanguinary of South Ameri-
can "revolutions" have been staged here, to be followed
by dictatorships as absolute as the world has known.
The constitutions are modeled in large part upon that
of the United States, but in actual affairs their pro-
visions are too often observed in the breach.

The relations of the United States and Colombia,
up to the beginning of the nineteenth century, were
uniformly cordial. There were upon her borders no
European colonies to raise questions which might
force the United States to act as her protector, as was
the case in Venezuela in 1896, and the commercial con-
nections of the two countries were not important.
There was little to bring the two nations into intimate
contact. At one point there was a common interest —
the promotion of good traffic conditions across the
Isthmus of Panama. This was important for the

1 Commerce Reports, Supplement, August 20, 1915.

NORTHERN SOUTH AMERICA 231

United States, especially in the period before the con-
struction of the transcontinental railways, for the
Isthmian route seemed to promise to be one of the
great avenues of communication between the eastern
and western coasts of the United States, though with
the establishment of rail communication between East
and West the Panama route became relatively less im-
portant to the United States. Good transportation
facilities over Panama were important to Colombia for
the same reason — her territories fronting on the Pa-
cific, comprising about half her coastline of 3,100 miles,
were practically shut off from the world unless outlet
could be secured through Panama. In Colombia's case
this route continues to be of paramount importance, for
even up to the present day no transcontinental railway
routes connect her Atlantic coast with the Pacific ports
of Tumaco and Buenaventura.

The interests of both countries in promoting good
trans-Isthmian communication brought about as early
as 1846 a treaty under which the United States was to
aid in keeping the transportation route across Panama
open for commerce. The long-standing friendship be-
tween the two republics was, as is shown elsewhere, sud-
denly interrupted by the Isthmian revolution and the
events which immediately followed. To reestablish
amicable relations has been the task of subsequent Ad-
ministrations, one not yet satisfactorily accomplished.

General Reyes, the President of Colombia, sought
during the Roosevelt Administration to secure a set-
tlement of the outstanding grounds for dispute. A
tripartite treaty was proposed between the United

232 CARIBBEAN INTERESTS

States, Panama and Colombia. The agreement drafted
was known from its negotiators as the Root-Cortes-
Arosemena treaty. By it, Panama was to pay $2,500,-
000 toward the Colombian foreign debt, the money to
be advanced by the United States, on the account of
the rental of the Canal Zone. The Colombia legisla-
ture rejected the agreement.1

During the Taft Administration a more ambitious
proposition was undertaken. It was proposed to buy
from Colombia the concession for an interoceanic canal
following in general the course of the Atrato River. Co-
lombia was further to lease certain coaling stations on
islands held by her in the Caribbean. She was to recog-
nize the independence of Panama. In return, the
United States agreed to pay Colombia $10,000,000 and
arbitrate certain claims involving the Panama Rail-
road. This treaty also met defeat in the Colombian
Congress.2

The desire to reestablish friendly relations with Co-
lombia again found expression early in the Wilson
Administration. Colombia insisted that our speedy
recognition of the new state and our promise to protect
its independence constituted an affront to her national
dignity and an interference with her rights for which

1 Text in Charles, Garfield, Treaties, Conventions, International
Acts, etc., Sen. Doc. 1063, 62d Cong., 3d Sess., 1913.

2 Diplomatic History of the Panama Canal, 63d Cong., 2d Sess.
(1913-4), Senate Documents, Vol. 15, and discussion in The Amer-
ican Year Book, 1913, p. 88; also Ex-United States Minister to
Colombia, James T. DuBois, on Colombia's Claims and Rights
(pam. n.d.) criticizing the diplomacy of the United States toward
Colombia. Other discussions are found in the bibliography.

NORTHERN SOUTH AMERICA 233

an apology was due. Before the interchange of views
had proceeded far, it was shown that Colombia desired
that one element in the proposed reparation be a money
payment by the United States. The United States
Minister, in order that the unhappy circumstances might
be "blotted out and forgotten," was instructed "to offer
. . . $20,000,000 for the complete termination of all
claims and differences." 1 The Colombian Government
accepted the offer to negotiate and, after personal inter-
change of views between her representatives and those
of the United States, presented at the American Lega-
tion on February 3, 1914, a counter proposition, the main
provisions of which were, first, that the United States
should express regret for what had happened; second,
that Colombian goods and citizens should be granted
at least as favorable terms in the Canal Zone and in the
use of the Panama Canal and railroad as were granted
to the goods and citizens of the United States; the
United States was to make a payment of $30,000,000,
besides $250,000 annually for one hundred years.

Thereupon negotiations were again taken up as to
the amount of the money payment, and after several
interchanges of views and the receipt of a telegram
from the Colombian Minister at Washington, which
read "Convinced that Congress will refuse more than
$25,000,000," the Colombian Government accepted a
compromise on that amount on April 7, 1914.

1 Letter of Thaddeus A. Thompson to the Minister of Foreign
Affairs of Colombia, October 1, 1913, published in Congressional
Record, Vol. 52, Part 6, 63d Cong., 3d Sess., Appendix, p. 17 (Dec.

18, 1914).

234, CARIBBEAN INTERESTS

The first article is reported as follows :

"The Government of the United States of America,
wishing to put at rest all controversies and differences
with the Republic of Colombia arising out of the events
from which the present situation on the Isthmus of Pan-
ama resulted, expresses in its own name and in the
name of the people of the United States, sincere regret
that anything should have occurred to interrupt or to
mar the relations of cordial friendship that had so long
subsisted between the two nations. The Government
of the Republic of Colombia, in its own name and in
the name of the Colombian people, accepts this declara-
tion in the full assurance that every obstacle to the
restoration of complete harmony between the two coun-
tries will thus disappear." x

The report, which was submitted with the treaty to
the Colombian Senate, declared it the duty of the nation
to secure "such reparation of a moral and material kind
as may be just and possible." The recovery of Panama
itself was declared impossible because of the "enormous
power of the Nation which has and does exercise guid-
ance of that entity in its birth and subsequent existence."
Therefore, it was urged that the treaty be ratified as
soon as possible in order to gain the advantage of a
Senate of the United States which, it was assumed, was
favorably disposed. The same attitude was disclosed
by the report of the committee of the Colombian House
of Representatives on the treaty. Its report recalled

1 A photographic copy of the English and Spanish texts, as pub-
lished in the Diario Oficial at Bogota, April 14, 1914, is given in
the American Review of Reviews, Vol. 49, p. 683, 1914.

NORTHERN SOUTH AMERICA 235

"the lamentable occurrences on the Istlimus in Novem-
ber, 1903"; pointed out the "possible contingency of a
change of international politics" in the United States
and urged speedy action. The first article of the treaty
is then partly quoted as follows: "The Government of
the United States of America . . . expresses sincere
regret for whatever thing may have occurred to inter-
rupt or alter the relations of cordial friendship which
for so long a time existed between the two nations."
Upon this the committee comments "A satisfaction
could not be expressed in a more final manner in laconic
diplomatic language. . . ." "The indemnity wipes out
. . . the attempted excuse for the despoilment of Colom-
bia in the name of universal civilization." l

The conditions under which Panama secured its inde-
pendence have been already sketched. Whether the
United States was guilty of conduct internationally
blameworthy is to be judged primarily from the facts of
the revolution.

The interpretation of the treaty by some of those

1 The documents used here are reprinted in translation in a
speech of J. Hampton Moore which appears in the Congressional
Record, Vol. 52, Part 6, 63d Cong., 3d Sess., Appendix, p. 18, Dec.
18, 1914. There is also a discussion of the various translations of
the Spanish text. The first article as quoted above varies in phrase-
ology from that given in the American Review of Reviews, Vol. 49,
1914, p. 683. A statement of the case of Colombia is found in,
"Why the Pending Treaty with Colombia Should Be Ratified," Han-
nis Taylor (pamphlet), Washington, 1914. Also see, A Chapter
of National Dishonor, L. T. Chamberlain, North Amer. Rev., 195,
pp. 145-174 (1912), and Earl Harding, In Justice to the United
States — A Settlement with Colombia; in Latin America, G. H.
Blakeslee, ed. (Clark University Addresses, 1913), pp. 274-89.

236 CARIBBEAN INTERESTS

who urged its adoption in the Wilson Administration
may be judged by the explanation of the reasons for
the agreement as given by William Jennings Bryan,
then Secretaiy of State. He is reported as saying,
"Colombia feels that she has been aggrieved; and what-
ever may be said as to whether or not this feeling is
justified, no one will deny that she has sustained great
financial loss in the separation of Panama from her"
and again, "It is not necessary to discuss the events
which gave rise to this estrangement because it does not
matter which party was at fault. The estrangement
exists, and this is the fact that must be dealt with." *

The interpretation which those prominent in the
Colombian Congress put upon the action of the United
States in making the treaty does not allow the assump-
tion that there is any doubt in their minds as to whether
the terms of the treaty constitute an apology for a
wrong committed, nor as to which party is at fault,
and a recognition of that point is to them of primary
importance.

Public opinion in the United States has been divided.
Opposed to the ratification of such an agreement are
those who feel that the desire to cultivate friendly rela-
tions with its neighbors to the southward, as has been
illustrated in many instances, may properly lead the
United States to make concessions and assume respon-
sibilities which, except for its peculiar international posi-
tion in America, it should be anxious to avoid. And
this treaty, it is argued, goes too far. To grant liberal

1 Reported by J. Hampton Moore in Congressional Record, Vol.
51, Part 17, 63d Cong., 2d Sess., Appendix, p. 743, July 13, 1914.

NORTHERN SOUTH AMERICA 237

treatment to weaker nations, and to do all that it is
possible to do to put them in a position to become strong,
is a policy far different from that of trying to satisfy
the demands of a weaker nation whether the demands
have any basis in justice or not. The United States
ought always to be just and may be generous, but to
make apology in an attempt to secure good-will by
asserting that "it does not matter which party was at
fault" is quite another thing. Whether an apology is
due turns precisely on the point "which party was at
fault." To make an apology when none is due is to
confess guilt where none exists, and such action is not
apt to promote real friendship, nor can money payments
undo the affront to national honor if one has been com-
mitted.

On the other hand, it is argued that some concession
to public opinion in Colombia should be made by our
Government even if our position may be demonstrated
to have been technically correct. There can be no doubt,
it is asserted, that the Washington Administration
sought, during the course of the negotiations preceding
the Panama revolution, to induce the Colombian Gov-
ernment to adopt a course of action which it wished to
avoid. It is asserted that a series of notes, which were
little less than covert threats, were despatched on April
24, June 13, and August 5, the object of which was
practically to coerce the Colombian Senate into accept-
ing the proposed convention. The last of these, sent
through the Colombian Minister of Foreign Affairs,
read "If Colombia desires to maintain the friendly rela-
tions which at present exist between the two countries,

238 CARIBBEAN INTERESTS

and at the same time to secure for herself the extraordi-
nary advantages that are to be produced for her, . . .
the present treaty will have to be ratified exactly in its
present form, without amendment whatsoever." 1

The considerations urged by President Roosevelt in
justification of the action taken at Panama have not
allayed the resentment aroused. In his message to Con-
gress on January 4, 1904, he wrote "When this gov-
ernment submitted to Colombia the Hay-Herran treaty
(January 22, 1903) it was already settled that the canal
should be built. The time for delay, the time for per-
mitting any government of anti-social spirit and of
imperfect development to bar the work was past.

"I have not denied, nor do I wish to deny, either the
validity or the propriety of the general rule that a new
state should not be recognized as independent till it
has shown its ability to maintain its independence."
"But like the principle from which it is deduced the rule
is subject to exceptions and there are in my opinion
clear and imperative reasons why a departure from it
was justified and even required in the present instance." 2

Later, in an address at the "Charter Day" exercises
at the University of California, he is reported as saying,
"I am interested in the Panama Canal because I started
it. If I had followed traditional, conservative methods,
I would have submitted a dignified state paper of prob-
ably two hundred pages to Congress, and the debate
on it would have been going on yet ; but I took the Canal

1 As quoted in Chamberlain, L. T., A Chapter of National Dis-
honor, North American Review, 195, pp. 145-74 (1912).

2 Ibid., p. 146.

NORTHERN SOUTH AMERICA 239

Zone and let Congress debate ; and while the debate goes
on the Canal does also." 1

These things taken together, it is argued, portray the
United States in a morally weak position. We were
willing by diplomatic pressure to coerce a weak nation.
That attempt failing, we welcomed a revolution in a
dissatisfied province and "precipitately" recognized it
as a new state. We at once guaranteed it against con-
quest by the former mother country. Further, our ex-
President has later declared that he had in mind to
advocate proceeding at the Isthmus without Colombia's
consent in case the revolution had not occurred. Under
these conditions, it is urged, it is not to be wondered at
if Colombia resents the brusque manner in which we
"took the Canal Zone" and feels that an apology for
the slight and reparation for the material damage is due.

II. Commercial

Few countries show greater contrast between present
conditions and possibilities than Colombia. By location
the keystone state of South America, its territory covers
435,278 square miles, an area ten times the size of New
York, and larger than that of France, Germany, Den-
mark, Netherlands, Switzerland and Belgium com-
bined. Its people number only 5,473,000, or 12.57 per
square mile. Its natural resources would support many
times the present population.

Until recently, Colombia lacked both good overseas
connections and internal communications. The latter

1 Ibid.

240 CARIBBEAN INTERESTS

she still lacks. In 1913, there were but 621 miles of
railway in the entire republic, a little more than in Sal-
vador and Costa Rica, one-twelfth its area. Imports
and exports must suffer possible damage because of the
frequent transshipment from railway to river-boats to
mule back. The prosperity of the country depends al-
most exclusively on agriculture and the mining of pre-
cious metals, and the marketing of agricultural products
is greatly hampered except in the districts in immediate
touch with water transportation. Lack of capital in
productive enterprises is also a hindrance. The average
rate of interest is 18 per cent. Capital from abroad is
already largely involved in the foreign trade, but com-
paratively little is found in local developments. The
coffee crop is, in normal times, financed in Germany ; a
British syndicate markets the emeralds of Bogota, and
British capital has given railway development its chief
support. The mines are British and American; the
fruit trade American.

Recent developments have brought Colombia trans-
portation facilities with the outside world which compare
favorably with those of any South American state and
make a strong contrast with the handicapped condition
of her interior commerce. In this respect the United
States enjoys a decided advantage over European com-
petitors. The fruit trade maintains a weekly service
from both New York and New Orleans. German lines
make the ports, there are connections with the Nether-
lands and France every three weeks, with Great Britain
three times a month, and with Italy once a month.

Due to its location also, the United States enjoys

NORTHERN SOUTH AMERICA 241

special advantages in Colombian trade, and these will
be greatly increased as the Panama Canal comes more
and more into use. The United States not only has
more frequent service but a shorter transit period than
any of its great competitors — both important factors in
bringing to it a larger share of Colombian commerce.
Curiously enough, this increase of exchanges with the
United States was contemporaneous with strained polit-
ical relations. The United States takes an increasing
proportion of Colombian exports. This fact has helped
to increase her purchases of American goods since the
amounts to be paid by United States importers can be
used as a fund upon which drafts may be made in pay-
ment for goods imported. As a result, too, of its close
connection with America, prices have come to be quoted
in United States dollars and cents, even in the retail
trade, though the official exchange is in pounds sterling.
The Government has shown a desire to make its mone-
tary basis one which will conform to the dollar standard.
The local paper money is now at a discount of 10,000
per cent, as compared to American gold.

The commercial exchanges of the United States and
Colombia have become important only in the twentieth
centuiy. In 1900, the total value of the Colombian ex-
ports to the United States was only $4,307,000. There-
after, the amount steadily rose and in less than a decade
and a half reached $18,862,800, an increase of over 400
per cent. We take more of the exports than all the
rest of the world and more than three times as much as
Great Britain, the country's next best customer. About
right-ninths of our importations consisted of coffee,

242 CARIBBEAN INTERESTS

which is of greater value than all other articles exported.
Other items which Colombia sends abroad in large quan-
tities are hides and bananas, the latter rapidly growing
in importance. In the import trade we furnish almost
a third of the total.1

Failure to settle international differences has there-
fore not affected the natural increase of Colombia's
shipments to the ports of the United States, and the
advantages of a quick market and direct exchange seem
to give reasonable assurance that she will continue to
purchase from her best customer.

VENEZUELA

I. Political

What is now Venezuela was first seen by Columbus
on his third voyage in 1498, but, except for coast set-
tlements, no foothold was secured by the Spaniards for
almost fifty years. The next century and a half was a

1 In 1913, the exports of Colombia amounted to $34,316,800,
of which 55 per cent, went to the United States.

The imports in 1913 were valued at $26,987,000, of which the
United States furnished 28.3 per cent.

Reports covering the commercial relations of Colombia are the
following :

Commerce of Colombia, Pan-American Union, Washington, 1913.
Daily Consular and Trade Reports, October 3, 1913; Dec. 9,
1913; Commerce Reports, Supplement, March 25, 1915; June 30,
1915; Aug. 20, 1915. Trade of the United States with Other
American Countries, 1913-14, Department of Commerce, Miscella-
neous Series No. 23, Washington, 1915.

Report on Trade Conditions in Colombia, Charles M. Pepper,
Department of Commerce and Labor, Bureau of Manufactures,
Washington, 1907.

NORTHERN SOUTH AMERICA 243

period of trial for the European adventurers because
of incessant Indian revolts. In 1718, the territory was
united with that now in Colombia in the vice-royalty
then known as New Granada. This connection was
finally dissolved in 1830, eleven years after freedom had
been won from Spain.

Independence did not bring an end to the disorder,
and up to 1863 one government followed another in
rapid succession. Then Guzman Blanco came to the
front, a man who maintained at least passable order.
After several preliminary manoeuvres, he was formally
elected President in 1872, and though not always in
office, he was always in power thereafter for a period of
twenty years. Like Diaz in Mexico, Blanco was in
reality a dictator rather than a president, but the country
enjoyed comparative prosperity at least under his rule.
The years since 1892 have seen another series of unfor-
tunate conflicts for office, extravagance in expenditures,
and disputes with foreign powers.

In 1896, there came to a head a troublesome contro-
versy between Great Britain and Venezuela involving
the boundary between the latter and British Guiana.
The dispute had been dragging on since 1841 but had
recently become more acute because of the discovery of
gold in the territory under discussion. The United
States had repeatedly been asked by Venezuela for its
good offices in bringing about a settlement, but Great
Britain, the stronger power, had not been anxious to
enter into negotiations. Her claims had recently shown
a tendency to grow. President Cleveland, fearing that
the vagueness of boundary might make possible the

244 CARIBBEAN INTERESTS

extension of control by a European power over what
was properly the territory of an American state, decided
that, Great Britain being unwilling to arbitrate the
matter, it was the duty of the United States to ascer-
tain what was the correct boundary.

Any further extensions of territory he held the United
States should resist on the principles announced in the
Monroe Doctrine. Great Britain refused to recognize
that the United States could properly claim to be a party
to the negotiations, but on February 2, 1897, arranged
an arbitration agreement with Venezuela. The settle-
ment, largely made possible by the position taken by
the United States, was in the nature of a compromise,
Venezuela accepting the standard that fifty years ad-
verse possession of territory should constitute good title.
In 1899 the arbitration tribunal met at Paris where ex-
President Harrison appeared as the counsel of Ven-
ezuela. As a result, though most of the territory in dis-
pute went to Great Britain, Venezuela was assured
the control of the mouth of the Orinoco, a region the
possession of which was essential to the free develop-
ment of her communications with her interior terri-
tories.

This controversy was hardly settled when Castro, the
most famous of recent political adventurers of the re-
public, seized the Presidency in 1900. For the next
two years civil war raged. In the midst of this trouble,
Great Britain, Italy and Germany pressed for the pay-
ment of amounts alleged to be due their citizens. At-
tempts to collect these amounts by peaceful means had
proven unsuccessful and they were now resolved to get

NORTHERN SOUTH AMERICA 24.5

the money by force. The claims were of various sorts.
Some involved the payment of dividends on railway
investments which had been guaranteed by the Ven-
ezuelan Government, others, the payment for property
of foreigners destroyed during civil wars; others, the
payment of interest due on the Venezuelan foreign debt.

In December, 1901, the German Ambassador at
Washington assured the State Department that there
was no intention on the part of the European powers,
as creditors of Venezuela, to violate the principles of the
Monroe Doctrine. Secretary Hay replied, calling at-
tention to a statement in a message of President Roose-
velt, pointing out the difficulty of collecting a debt by
force, and intimating that the United States, in order
to avoid the taking of at least temporary control of
ports, should exercise a sort of international police
power on behalf of the weaker American states. No
objection was made, however, to the use of force not
involving the occupation of territory. A year passed
in fruitless negotiation between Venezuela and the Eu-
ropean powers, and in December, 1902, a warlike block-
ade of her ports was declared, and the ships of her minia-
ture navy were seized or sunk.

The United States in February, 1903, succeeded in
bringing the disputants to a compromise. Venezuela
agreed to recognize a part of the claims and to set
aside 30 per cent, of certain customs receipts for their
payment. All claims presented by foreign Govern-
ments were to be submitted to mixed commissions for
adjustment. Venezuela, at this point, took the stand
that all her creditors should be treated alike. The block-

246 CARIBBEAN INTERESTS

ading powers insisted that their claims should have pref-
erential treatment. In May, 1903, at the suggestion of
President Roosevelt, it was agreed to refer this question
to the Hague Court for settlement. A decision was
handed down in February, 1904, in favor of the blockad-
ing powers.

Meanwhile, during the summer of 1903,, mixed com-
missions held sessions at Caracas to determine the
amounts of the claims justly due the several countries
which Venezuela was to pay. The result amply dem-
onstrates the danger of accepting claims presented by
the claimants of any country at their face value and pro-
ceeding to compel payment by force. It illustrates
negatively the advantages of some arbitral procedure to
determine which are just and should, therefore, be en-
forced. Out of claims amounting to 190,676,670 boli-
vars,1 the commissions allowed only a total of 38,429,376
bolivars. The British demands were decreased from a
total of 14,743,572 bolivars to 9,401,267; the German
from 7,376,685 to 2,091,908; the Italian from 39,844,258
to 5,785,962. Nor were the claims urged by citizens
of non-blockading powers found any more substantial.
For example, French citizens sought payment of a total
of 17,888,512 bolivars but were awarded 2,667,079, and
citizens of the United States claimed 81,410,952 but
were granted only 5,785,962 bolivars.

After this humiliating experience with European
powers from which it had been extricated by the efforts
of the United States, it might have been supposed that
the Castro government would have exercised greater

XA bolivar is equal to $.193.

NORTHERN SOUTH AMERICA 247

care in its treatment of foreign investors, and would have
been more favorably disposed toward arbitration as a
means of adjusting the claims against the country. But
such was not the case. During the next five years vari-
ous disagreements arose which the Government con-
sistently refused to arbitrate. Those involving the
United States, her friend in the controversy recently
ended, were given no better treatment than others. As
a result, on June 13, 1908, we withdrew our Minister
from Caracas.

Our chief claims were five in number. First, an
American citizen, Jaurett, had been summarily expelled
from Venezuela on twenty-four hours' notice with no
opportunity to settle his affairs. Second, the Orinoco
Corporation which held a concession in the delta of the
river of that name was denied its rights. The United
States- Venezuelan Mixed Commission of 1903 had de-
clared in its favor and its claims had subsequently been
upheld by the Venezuelan courts. Still, in 1906 the
Castro government granted privileges to other com-
panies conflicting with those already granted the Ori-
noco Corporation. Third, the New York and Berniu-
dez Company had a concession from the Government to
exploit an asphalt lake and the lands around it. The
Government now proceeded to oust the company be-
c?aise it had not developed the land around the lake,
though it contained no resources which could be ex-
ploited. Fourth, the United States and Venezuela
Company also had a concession to exploit an asphalt
deposit. Under the terms of its contract, it was to be
free from taxation, but Castro proceeded to lay taxes

248 CARIBBEAN INTERESTS

upon the concern so heavy as practically to amount to
confiscation of the concession. Fifth, the Orinoco Steam-
ship Company had been granted a monopoly of water
traffic in a certain portion of the republic, including
the mouth of the Orinoco. Venezuela summarily can-
celed portions of the company's grant.

Not only with the United States was Castro again
in trouble; a dispute with France also had resulted in
breaking off diplomatic relations with that country,
and he had summarily dismissed the Dutch Minister.
With other Governments the relations were again at the
breaking point. The Netherlands Government, after
communicating with the United States, decided to resort
to armed action. At this juncture Castro himself left
for Europe. A Dutch cruiser seized one of the eight
Venezuelan gunboats and put the crew ashore with a
statement that similar treatment would be given the
other seven vessels, if apprehended. With Castro gone,
his enemies moved to overthrow his government. Headed
by Juan Vicente Gomez, a lieutenant of the former
dictator, they seized control of the public buildings and
Gomez became President in December, 1908.

He at once invited the United States to send warships
to Venezuela to maintain order against the Castro
party.1 The new government was now disposed to give
our claims more considerate treatment and, through the
Minister of Brazil, suggested arbitration. In the nego-
tiations which followed, four of the five cases were set-
tled out of court. Jaurett was paid an indemnity of

1 An account of these events may be found in Hasell's Annual,
1910, p. 327.

NORTHERN SOUTH AMERICA 249

$10,000; the New York and Bermudez Company com-
promised its claim, and paid damages for having aided
a rebellion. The United States and Venezuela Com-
pany was to receive $475,000 American gold, payable
in eight annual instalments at the office of the Secretary
of State in Washington, and the Orinoco Corporation
received $385,000 American gold, under similar condi-
tions.

One case, that of the Orinoco Steamship Company,
still remained unsettled and this it was agreed to refer
to the Hague Court. This dispute had been passed
upon by the mixed commission of 1903. The Hague
Court was to decide whether it should be reargued, and
if so, was to take up the matter on its merits. The com-
pany had been allowed $28,000 in 1903 on a claim of
$1,400,000. The judges selected handed down their
decision October 25, 1910. They held that the case
should be reargued but refused to consider all the items
on their merits, though the United States claimed that
was the intent of the agreement. Only those items,
which on their face involved injustice, were reargued —
a rule which shut out the greater part of the claims, in
one instance, an item of $1,200,000. The amount actu-
ally awarded the American claimants was raised from
$28,000 to $92,000.*

Since 1908, our political relations with Venezuela have
been uneventful. Gomez has continued in the presi-
dency apparently observing the political arrangements

1 The American claims against Venezuela are discussed in the
American Journal of International Law, Vol. 3, p. 436 et. seq.; p.
985 et seq.; and Vol. 5, p. 230 et seq.

250 CARIBBEAN INTERESTS

outlined in the constitution as little as did his predeces-
sor, but he has shown at least that he appreciates the
advisability of avoiding international complications.

II. Commercial

The political control exercised by Venezuela nom-
inally extends over 393,976 square miles, with a popula-
tion of only 2,756,0001 making it, with the exception
of Bolivia, the most thinly populated republic of the
New World. Like her neighbor to the West, her inter-
nal development has hardly begun. There were but
534 miles of railroad in the Republic in 19152 and the
highways by which points, not on navigable waters, are
reached are of the most primitive sort. Yet compared
to Colombia, Venezuela makes a creditable showing in
foreign trade. Her total in 1914 was valued at $43,-
329,126, compared to Colombia's $51,000,000, which
makes $15.38 per capita for Venezuela, compared to
$11.20 per capita for Colombia. Like her neighbor,
she has few industries, practically all manufactured ma-
terials being brought from abroad, even the sacking for
the export of coffee.

The prosperity of the country depends chiefly on
agricultural crops, especially coffee, which is planted on
180,000 to 200.000 acres. Coffee constitutes about one-
fourth of the value of the exports, and about two-thirds

1 The official estimate of March 31, 1915, places the popula-
tion at 2,812,668. There has been no actual census since 1891,
when the population was 2,323,527- Commerce Reports, Septem-
ber 21, 1915.

2 Commerce Reports, September 21, 1915.

NORTHERN SOUTH AMERICA 251

of the value of the exports to the United States, the
other important items being hides, rubber and cacao.
In return, the United States sends principally food-
stuffs and steel. Foreign trade has shown a steady
increase. In 1909, it totaled only $25,794,813, and in
1914, $43,329,126. The United States has taken an
increasing share, reaching in 1914, 36.2 per cent, of the
imports and 40 per cent, of the exports.1

1 Reports on Venezuelan commercial conditions are the follow-
ing:

Venezuela (pam.), Pan-American Union, Washington, 1913.

Daily Consular and Trade Reports, April 7, 1913; October 24,
1913; December 15, 1913; February 14, 1914; and October 12,
1914.

Commerce Reports, Supplement, July 2, 1915.

CHAPTER XIV

THE ECONOMIC DEPENDENCE OF THE CARIBBEAN

To the average person the Caribbean calls to mind
turbulent political conditions, disease and tropical prod-
ucts. Its republics and colonies are individually little
more than names to him. He does not realize the impor-
tance of the exports of the various units, the degree to
which local life depends upon foreign trade nor the
extent to which single products constitute its bulk. In
fact, in no region of the world probably is there depen-
dence upon fewer crops, is life more conditioned by
export trade, and that export trade composed to such
a degree of a few staple products in each community.

The civilization is predominantly agricultural and
even the development of this industry is primitive. Pub-
lic revenues are derived primarily from taxes on imports
and exports, or from these and various Government
monopolies. Income from taxes on real estate is small.
Under these conditions, if the crop of the principal arti-
cles of export fails, there is wide popular distress. The
same effect is produced in less marked form if the crop
is superabundant; then prices become unprofitable.

We in the United States realize with difficulty the
economic dependence which such conditions involve.
With us, a failure of one crop is usually counterbal-
anced by bumper production in another. Since we have

252

CARIBBEAN DEPENDENCE 253

a variety of products, a large crop in one line disturbs
the general market less than in a country which con-
fines its attention to a small number of staples. Our
domestic manufactures are developed, we produce the
bulk of our raw materials and we consequently rely less
on our foreign trade. Even if hostile tariffs cut off our
foreign trade in certain lines or hard times abroad make
purchases there fewer, it affects us only in a minor way.
The country is largely sufficient unto itself. Not so in
dependent regions like the Caribbean. The failure of
the coffee crop of Salvador, the sugar of Barbados, the
cocoa of Trinidad, would throw their peoples into finan-
cial straits, it would necessitate general extension of
credit and bring locally acute hard times. Anything
which tends to disturb the foreign market for their
chief product would have an immediate effect to which
we have nothing to compare.

This economically dependent position shows its dis-
advantages, too, not alone in the effect on the prosperity
of individuals. If the crops are poor, the people can-
not buy so freely abroad, imports fall, and with them
the income of the Government. Of course, this is true
in all countries. Whenever hard times come, national
revenues shrink, but the difficulty is not so great with
those countries of diversified products. Foreign trade,
then, bears to the prosperity of both the people and
the Government of these countries a relation of much
greater intimacy than is the case in the average tem-
perate region. The degree to which single crops or a
few crops are the mainstay of some of these units is
indicated in the table on the following page.

254

CARIBBEAN INTERESTS

H
ffl

2
E

u

u

w

w

5 "S

o

■*-<

a

R

o

W

01

£

Pm

5

+»

H

a

o

V

H

0)

u

o

a

H

Ph

a

a

I

|

5

o

fe

• too*

•I- I-

• o •*

• coo

• coo«>

• co t»co

•t-HO

■ m o>-i

t-wo — ©o

•f oaiooom

CO t~ <C U5 «5 •*

S-i la 1*5 sj-is^l-g g ^ i

STSa O « O O g J 3J'E 5«33

a

11

JL i— I • <— ' i-h M m

a->"2 » CO '"' CO r- 5 o

* . CO . r-l~«

•O>o^.-W >' - oj

J?7 ao 8v° *>

j£ TJ &. S. C „

oj+j o o o o^jja
n. a a n. an. R. a o

(S § giS^esft! It

"^ -X *^ "tt ^3 "^ "« *o -J

offcsooto

S6.|

© O *■> o o o o P-3

's I !'"§'§ !f !s o a
•saassss-

SjwS

05 -&™

■- .2 z; «> •» bs 2
a^jja tj a«o,*

flf^jf ■§**.•§■§
§• e.a e, g, a ©.ft

.*- *. a *- ** a** &.

-e-w^-w •«<%-«
«e»as«o8a

,8 0 8.08 g._S O

a a «> a a y, a a

CARIBBEAN DEPENDENCE 255

The weakness of the economic position of these coun-
tries is further emphasized by a consideration of the
character of the market for their products. The ma-
jority of Caribbean exports are agricultural products
but not the basic foodstuffs. With the single exception
of sugar, none commands a market little affected by
economic conditions. The fruit trade, cacao produc-
tion, the tobacco market, the asphalt trade and even
the coffee industry are dependent for their prosperity to
a greater degree upon the prosperity of the commercial
nations where their chief market lies. These lands
suffer, therefore, not only the hard times which come
from local causes, they are especially subject also to
the reflection of hard times from the countries of their
chief markets.

Finally, adverse tariffs in the principal purchasing
countries may affect them seriously, much more seri-
ously than they affect countries of diversified agricul-
ture with developed manufactures. For example, the
tariff recently proposed to be placed upon imports of
bananas into the United States would have a much more
serious effect on the prosperity of Caribbean countries
than a similar discrimination against any United States
article of export would have had upon the prosperity
of the American workingman. The fruit trade illus-
trates best of all the economically weak position of these
communities. To be sure, the market for their fruit is
being rapidly widened with the improvement of trans-
portation facilities and methods of preserving and ripen-
ing the products, but the United States will naturally
remain the chief consumer. If our tariff on fruits were

256 CARIBBEAN INTERESTS

raised it could not fail to bring* hardship to millions
outside our borders. Conversely, a lowering of our
tariffs on citrus fruits would stimulate another branch
of Caribbean industry which now languishes for the
benefit of our own growers in Florida and California.

The treatment of sugar in our tariffs brings out the
relation of the prosperity of these islands to their access
to foreign markets. When the Underwood- Simmons
tariff was passed, it was given great praise by the Bar-
badians and others who before had paid the full tariff
rate for any sugar sent us, and by the Cubans who
would no longer haA^e to pay even the twenty per cent,
of the regular rate demanded by the reciprocity treaty.
The Porto Ricans looked askance at a measure which
destroyed the advantage they had enjoyed over their
West Indian neighbors and the producers of cane and
beet sugar in the United States were outspoken in their
opposition, as they have regularly been opposed to the
free importation of any sugar produced outside conti-
nental United States.

The coffee trade illustrates in a different way the
dependent position of the Caribbean regions. Next to
Brazil, the most important Latin- American coffee pro-
ducers are Venezuela, Guatemala, Colombia, Nicara-
gua, Haiti and Costa Rica. But none produces in suffi-
cient quantity to be a serious competitor to Brazil.1 The

1 "For some time the West Indies took the lead in coffee pro-
duction from which they have strangely declined. Java eventu-
ally outstripped them, to be in turn outstripped by Brazil, which
at present supplies more than three-fourths of the world's coffee
production." Coffee, Monthly Bulletin of the International Bureau
of American Republics, Washington, November, 1908, p. 860.

CARIBBEAN DEPENDENCE 257

result is that this trade, forming a large percentage of
the total exports, is dependent for its prosperity upon
the price of Brazilian coffee, except to the extent that
the product of each country is able by its peculiar flavor
to establish its own market. In this case, therefore, the
prosperity of the country, so far as it is determined by
its coffee trade, is dependent, not only upon favorable
tariff rates which thus far have been the general good
fortune of coffee-producing countries, but also upon the
amount and character of the crop in the country of
greatest production and upon the conditions under which
its marketing there is permitted. Of course, this is true
of markets for all growing crops in all sections of the
world, but it is especially true when one country holds
such a dominant position in production as Brazil does
in raising coffee. High prices for Brazil mean high
prices for these countries and vice-versa. Thus all these
countries were able to profit by the rise in price tem-
porarily brought by the Brazilian valorization scheme
and suffer now from its break up, though more fortunate
than the Brazilian producer in that they are not having
to pay for the experiment.

Cacao, like coffee, is consumed chiefly in countries
where it is not produced. The best cocoa is a factory
product — a product thus far of temperate regions.
Even the manufactured product consumed in the coun-
tries where it is raised, except among the poorer classes,
is imported from abroad. The prosperity of this indus-
try, like that of coffee, depends, therefore, primarily
upon the prosperity of foreign lands and favorable
tariff rates.

258 CARIBBEAN INTERESTS

In imports also the Caribbean region is greatly de-
pendent upon the markets of other countries. Com-
pared to conditions of a generation ago there is an
increasing dependence on a foreign food supply. Un-
like the classic example of Great Britain, this is the
result, not of the development of a large manufactur-
ing population and a declining agriculture, but of a
development of local agriculture along particular lines
not productive of foodstuffs of the kind and variety
now demanded. It represents an increased demand for
foodstuffs in amount and a change in the habits of the
people as to the varieties used. A similar development
has, of course, long been going on in more temperate
climes. The introduction of root crops into England
from the Continent is a favorite example of the diversi-
fication of our food habits, the increased consumption
of maize, tomatoes, rice, tropical fruits, and a host of
other vegetable products in the United States and else-
where illustrates a later development of a similar sort.
Food consumption is undergoing a revolution in trop-
ical and subtropical countries. They are taking up
where possible the raising of the foodstuffs of the tem-
perate zone and are importing from distant regions
an increasing portion of the food which they cannot or
at least do not produce for themselves.

Perhaps the most striking example of this develop-
ment in the Caribbean is the large rice trade built up by
the Germans. The cultivation of paddy had been intro-
duced into various West Indian and northern South
American territories, but met with only slight success
except in the British colonies which have imported East

CARIBBEAN DEPENDENCE 259

Indian laborers. In the rest of the Caribbean, rice cul-
ture has never become important. Larger supplies are
yearly brought from Rangoon, Burma. The larger
part of the shipments do not come direct. Unhulled
rice is carried to Hamburg where its preparation is fin-
ished and the by-products used as food for animals. The
cleaned rice is then reshipped to the Caribbean, forming
one of the staple German exports in almost all the com-
munities where German trade makes a showing.

Though this example of dependence on a foreign food
supply is more striking than that on any other single
article, it illustrates an increasing dependence on im-
ports, which, taken in connection with the unusual de-
pendence of the prosperity of the region upon a few
leading export products, makes the economic position of
these peoples unusually weak.

CHAPTER XV

CARIBBEAN PRODUCTS

A brief review of the principal Caribbean products
and their markets will show their importance as an ele-
ment in the foreign trade of the United States. It will
also indicate the possibilities of further developing the
various industries that may attract American capital
and thus, in another way, indirectly touch our national
interests. In this chapter are discussed chiefly the
Caribbean industries which have already acquired im-
portance for us. Among the notable products of the
region are sugar, coffee and cacao. The fruit trade and
possible development of oil resources are separately
treated; tobacco receives attention in the chapter on
Cuba, and the promising copra industry has yet to take
an important place in Caribbean commerce.

SUGAR

Sugar, in the past generation, like several other prod-
ucts of great importance to the tropics, has found its
conditions of production revolutionized. Natural in-
digo, formerly a typical product of tropical regions, has
been largely displaced by the synthetic product. Wild
rubber, which seemed destined for a time to make the
Amazon region of increasing commercial importance, is

260

CARIBBEAN PRODUCTS 261

surrendering more and more to the rubber gathered on
plantations in the tropics of Africa and Asia. Sugar,
once primarily a tropical product, now has to compete
with the beet sugar of the temperate zones.

However, an old industry, even though temporarily
one of small or no profit, may possibly be made profit-
able by adopting better methods of production. This
has proved to be the case with cane-sugar manufacture.
The old small-scale production required the outlay of
capital small in amount compared to that demanded
by an up-to-date establishment. But it was decidedly
uneconomical. By the older method a large proportion
of the sugar value remained in the cane, and the juice
was evaporated by the old, uneconomical, open-pan
process.

Modern methods are gradually displacing the tradi-
tional mode of manufacture and putting cane sugar into
a position where it can more easily compete with that
produced from beets. Gradually, in the West Indies,
steam-power machinery, capable of extracting all but
a small portion of the cane juice, is driving out the pic-
turesque windmills, and the vacuum pan is conserving
what formerly went to waste during the process of
evaporation. In addition, legislation and the interna-
tional agreements which have now put a partial check
upon the artificial stimulus to beet growing, have helped
to restore the production of cane sugar to the list of
profitable industries.

The greatest cane-sugar producing regions of the
world are now British India and the Caribbean. In
1914-15, British India produced 2,400,000 tons and the

2G2

CARIBBEAN INTERESTS

Caribbean produced 3,243,000 tons. Of the Caribbean
production, 2,600,000 tons are credited to Cuba.1 The
Caribbean regions, considered as producers of cane sugar
which enters into international trade, far outrank all

The Caribbean Sugar Crop Estimates, 1914-15

(Compiled from Willet and Gray's Statistical Sugar Trade Journal,
November 5, 1914, p. 417)

Country

Tons of Cane Sugar

Cuba (product)

Porto Rico (product)

British West Indies

Trinidad (exports)

Barbados (exports)

Jamaica (exports)

Other British West Indies.
French West Indies

Martinique (exports)

Guadeloupe

Danish West Indies

St. Croix (product)

Central America

Demarara (exports)

Surinam (product)

Venezuela

2,600,000
310,000

45,000
30,000
15,000
24,000

40,000
35,000

5,500

22,000

100,000

13,500

3,000

Total.

3,243,000

Total cane sugar crop of the world 9,724,000 tons

European beet sugar 5,700,000 '

United States beet sugar 570,000 '

Grand Total, Cane and Beet Sugar 15,994,000 tons

others. British India, though one of the oldest sugar-
producing countries in the world, not only consumes all
of its own sugar product, but imports to the amount of

1 Willett and Gray's Weekly Statistical Sugar Trade Journal,
Nov. 5, 1914, p. 417. The output for 1916 was estimated as
22,214,000 bags of 325 pounds each, or the equivalent of 3,609,773
short tons. (Commerce Reports, Feb. 18, 1916.) See also Com-
merce Reports, May 5, 1915, Oct. 8, 1915.

CARIBBEAN PRODUCTS

203

twenty-five to thirty million dollars' worth annually,
while comparatively little of the West Indian product is
used locally. If the India cane sugar crop, locally con-
sumed, he subtracted from the total cane sugar pro-
duction of the world for 1914-15, it is found that the
Caribbean produces about forty-five per cent, of the
rest of the world's supply. The estimates of the Carib-

Imports of Sugar into the United States from Other
American Countries, 1914

(Compiled from Trade of the United States with Other American Countries, 1913-1%.

Bureau of Foreign and Domestic Commerce, Miscellaneous Series,

No. 23, Washington, 1915)

Caribbean Region (Foreign)

Country

Pounds

Value

Guatemala

Mexico

Barbados

Cuba

Danish West Indies

The Dominican Republic .
Dutch Guiana

Total .

1,258,202

$30,129

2,182,378

78,926

610

15

4,926,606,243

98,394,782

440

10

4,316,282

86,761

398,371

7,617

4,934,762,526

$98,598,240

Caribbean Region (Domestic)

Porto Rico

641,252,527

$20,239,831 l

Total Caribbean

5,576,015,053

$118,838,071

South American Countries Not Above Listed

Peru

8,981,684

$181,519

Grand Total

5,584,996,737

$119,019,590

1 Figures for Porto Rico, 1914, from Monthly Summary of the Foreign Commerce
of the United States, June, 1915, p. 1075. In this chapter Mexico is included
among the Caribbean countries, the trade conditions affecting its products being
substantially the same as in the other countries.

264 CARIBBEAN INTERESTS

bean sugar crop for 1914-15 are shown in the table on
page 262.

If the Caribbean be considered in its importance as
a source of supply for the United States, the figures are
even more telling. The chief reliance is upon Cuba, as
the table on page 263 shows. The only other important
source of our cane sugar, besides those enumerated, is
Hawaii.

At the present time the development of the sugar
industry is the most prominent single economic interest
of citizens of the United States in the Caribbean. Not
only does it depend upon this region for 50 per cent, of
its supply of this important necessity l but its export
trade has greatly profited by the stimulation given
through the sugar production to Caribbean imports.
Further — and this is, of course, in a less striking way
typical of all economic developments in the Caribbean —
American capital is seeking investment in the sugar
plantations, so that not only is the trade it involves
becoming American, but the industry itself is becoming
American in ownership. Estimates of the degree to
which this has already become the case cannot be accur-
ate, but all agree that American ownership is a decided
feature of the industry, and is rapidly increasing. In
Cuba and Porto Rico this development has been most
marked. British Consular Reports stated in 1912-13,
"A very large proportion of the mills [in Cuba]
are in the hands of Americans, and it is probable that

1 United States consumption of sugar in 1914-15 was
8,630,000,000 pounds, of which Cuba furnished 4,785,000,000.
{Commerce Reports, Oct. 8, 1915.)

CARIBBEAN PRODUCTS

265

Production of Coffee by Countries — 1903 to 1914 *
(Standard Bags of 132 . 28 Pounds Avoirdupois)

Years

Rio

Santos

Victoria

Bahia

Total Brazil

1903-04

4,018,000

6,389,000

437,000

285,000

11,129,000

1904-05

2,547,000

7,426,000

391,000

165,000

10,529,000

1905-06

3,244,000

6,983,000

369,000

207,000

10,803,000

1906-07

4,241,000

15,392,000

394,000

165,000

20,192,000

1907-08

3,409,000

7,203,000

350,000

162,000

11,124,000

1908-09

2,886,000

9,533,000

390,000

108,000

12,917,000

1909-10

3,449,000

11,495,000

276,000

133,000

15,353,000

1910-11

2,438,000

8,110,000

185,000

223,000

10,956,000

1911-12

2,491,000

9,973,000

382,000

194,000

13,040,000

1912-13

2,900,000

8,585,000

479,000

180,000

12,144,000

1913-14

3,000,000 2

10,250,0002

465,000 2

130,000 2

13,845,000 2

1914-15

3,000,000 2

8,000,000 2

400.0002

150,000 2

11,550,0002

Years

Mexico

and Central

America

Venezuela

and
Colombia

West Indies

Haiti

1904

1,465,000

1,705,000

1,488,000

1,513,000

1,235,000

1,710,000

1,523,000

1,507,000

1,572,000

1,423,000

1,650,0002

1,600,0002

1,355,000
869,000
823,000
1,063,000
1,036,000
1,202,000
1,070,000
1,080,000
1,413,000
1,478,000
1,450,000 2
1,500,0002

150,000

200,000

150,000

130,000

190,000

160,000

230,000

154,000

167,000

260,000

225,0002

220.0002

536,000

1905

250,000

1906

351,000

1907

375,000

1908

514,000

1909

286,000

1910

451,000

1911

376,000

1912

455,000

1913

375,000

1914

500,000 2
450,000 2

1915

Years

Africa

East Indies

World's Production

1904

175,000

137,000

121,000

115,000

135,000

131,000

142,000

146,000

155,000

110,000

125,000 2

140,000 2

706,000
659,000
732,000
537,000
512,000
363,000
481,000
566,000
834,000
724,000
895.0002
l.OOO.OOO2

15,516,000

1905

14,349,000

1906

14,468 000

1907

23,925,000

1908

14,746,000

1909

16,769,000

1910

19,250,000

1911

14,785,000

1912

17,636 000

1913

16,514,000 1
18 690 000 2

1914

1915

16,460,000 2

1 Figures from Report of Messrs. G. Duuring and Zoon of Rotterdam, furnished
by the Coffee Exchange of the City of New York.

2 Estimated.

266 CARIBBEAN INTERESTS

not more than one-third of the mills remain in Cuban
hands." x

COFFEE

Brazil is preeminent among the world's coffee-grow-
ing countries. In 1914-15, that country is estimated
as contributing 11,550,000 bags of 132 pounds each
in a world's total of 16,460,000. Second in impor-
tance come the countries of the Caribbean and Mexico,
which in 1914-15 produced 3,770,000 bags. The
world's production of coffee is indicated in the preced-
ing table.

The greatest coffee-consuming country in the world
is the United States. The annual consumption is over
ten pounds for every inhabitant,2 and over half of the
world's total. It might naturally be supposed because
of its great use of coffee that the United States would
buy largely, tariff conditions being equal, from the
Caribbean countries lying practically at its door. This
tendency has developed only recently. The principal
market for Caribbean coffee — said by many connois-
seurs to be far superior to the standard grades of Brazil
— has been Europe, and America has sought her supply
at Rio and Santos. Tariffs in the past have doubtless
interfered to deflect the normal course of trade. The
unfavorable conditions of trade with Porto Rico when

1 Diplomatic and Consular Reports, 1912-13 [Cd. 6005-78], No.
4905, Annual Series, 1912-13.

2 The importations in 1914-15 reached 1,118,690,524 pounds
(Commerce Reports, September 10, 1915). It is to be noted that
this total is swelled by the European War, due to which New
York became a transshipment port for coffee, the reexports amount-
ing to 66,974,501 pounds in 1915.

CARIBBEAN PRODUCTS

267

it was a colony of Spain, for example, seem to have pre-
vented an appreciation of the excellence of its coffee, a
circumstance which American possession, with the at-
tendant revolution in the commercial relations of the
island, has not overcome. The present French reci-
procity treaty with Haiti doubtless tends to draw the
coffee trade of that island away from the United States;
for though coffee enters free into our ports, the French,
who have special privileges in the Haitian import trade,
have natural advantages that come with established sell-
ing connections.

The total importation of Caribbean and other Amer-
ican coffee in the United States, in 1914, is shown in
the following table.

Statistics of the trade in the United States in recent

Coffee Importations of the United States from American Countries

for 1914 1

Caribbean (Foreign)

Country

Pounds

Value

Costa Rica

4,023,374

25,009,202

664,901

1,437,960

308,438

8,758,605

49,385,504

1,468,819

14,208

28,249

901,599

2,124,432

1,073,186

91,830,531

49,953,478

$485,142

3,067,592

78,542

176,944

44,516

1,090,907

8,028,186

171,038

2,685

3 186

Guatemala

Honduras

Mexico

Jamaica

Cuba

Dutch West Indies

Dutch Guiana

158,941

Haiti

164 201

The Dominican Republic

132,864

Colombia

11,556,038

Venezuela

6 194 240

Total Foreign Caribbean

236,982,486

$31,355,022

1 Trade of the United States with Other American Countries, Miscellaneous Series*
No. 23, Washington, 1915, for all foreign imports. The figures for Porto Rico are
from Monthly Summary of the Foreign Commerce of the United States, June, 1915.

268

CARIBBEAN INTERESTS

Caribbean (Domestic)

Country

Pounds

Value

Porto Rico

420,644

$73,279

Total Caribbean

237,403,130

$31,428,301

South American Countries Not Above Listed

85,800

743,113,500

1,125,419

$13,014

Brazil

76,016,463

Ecuador

102,302

Grand Total

981,727,849

$107,560,080

years show that Caribbean coffee is increasing in pop-
ularity. Of the increase in consumption in the last
three years about one-half came from Caribbean coun-
tries. In figures of value an even better showing is
made.

Importations of Coffee into the United States — 1912-13 to 1914-15

(Compiled from Monthly Summary of the Foreign Commerce of the United States

June, 1915)

1912-13

1913-14

1914-15

Imported from

Pounds

Value

Pounds

Value

Pounds

Value

Caribbean Region (Foreign):
Central American States
and British Honduras. . .

32,172,524
26,121,439
4,110,032
89,684,514
49,671,060

$4,115,720
4,090,909

510,0(17
11.728,459
7,040,173

40,202,480
49,385,504
4,711,269
91,830.51?
49,953,478

$4,943,643

8,028,186

474,221

11,556,038
6,194,240

75,350,258
52,706,120
10,230,552
111,077,449
72,463,140

$8,631,967
6,898,161

West Indies and Bermuda.

1,477,051
13,710,164

7,745,268

Total Caribbean (Foreign)
Caribbean (Domestic):

201,759,569
773,626

27,485,328
132,970

236,083,244
420,644

31,196,328
73,279

327,827,519
4,159,893

38,462,611
542,679

202,533,195

1,956,676
7,155,967
639,262,011
7,559,765
4,083,462
1,353,307

$27,618,298

350,093

1,111,110

87,807,451

1,254,879

692,804

202,144

236,503,888

5,905,654
1,243,736
743,113,500
8.673,941
4.1 10,032
2,368,210

$31,269,607

936,763
204,521
76,010,463
1,361,847
695,088
314,382

331,987,412

1.583,672

738,462

773,400,315

10,898,139

2,383,741

1,858,676

$39,005,290

All Other Countries:

253,731

114,439

65,492,280

1,811,375

Others in Asia and Oceania.

431,928
199,280

Total Non-Caribbean

661,371,188

$91,477,881

765,445,073

$79,529,064

790,863,005

$68,303,033

CARIBBEAN PRODUCTS 269

Summary of Comparative Increase of the Importation of Coffee into the
United States from 1912-13 to 1914-15

Increase in value of importations from foreign Caribbean 1912-13 to

1914-15 $10,977,283

Increase in value of total Caribbean 1912-13 to 1914-15 11,386,992

Decrease in value of importations from Brazil 1912-13 to 1914-15. . 22,375,171

Decrease in value of importations from all non-Caribbean countries . . 23,174,848

The proportions of the coffee grown in the various
districts are not the measure of the fitness of their lands
for the purpose. Cuba's chief product was formerly
coffee, but its cultivation was later neglected for tobacco
and now for sugar. Porto Rico is also forsaking coffee
for sugar. The Dominican Republic produces less
coffee than her neighbor, Haiti, which markets in good
years half a million bags. Haiti's land is better suited
to this crop but the Dominican Republic has much which
is excellent for the purpose, and in all these regions a
revival of the coffee industry is looked for. It is being
actively encouraged by the government of Cuba. Cen-
tral America and northern South America have also
made only a beginning in the development of their possi-
ble coffee industry. As the taste of the American con-
sumer becomes educated to the differences and virtues
of the varieties, and as the political and commercial rela-
tions of the United States with the regions south become
more intimate, there is no doubt that coffee imports com-
ing from the Caribbean will increase.

CACAO

Coffee and tea, the world's greatest beverages of gen-
eral use, are Oriental products. Their cultivation goes
back to time immemorial and the trade in them with

270 CARIBBEAN INTERESTS

Europe was one of the important features of the com-
merce which brought the West and East closer together.
Tea still remains typically an Oriental product. Its cul-
tivation elsewhere, due to climatic and labor conditions,
has never developed on a large scale. The contrary is
the case with coffee. For generations the countries
most important in coffee production have been in the
New World. Our own day has seen an increasing im-
portance assumed by a third beverage made from the
cacao bean. Unlike coffee and tea, cacao is a native
American product and it is still chiefly grown in Amer-
ica. It was highly prized as the source of a beverage,
and as a food by the Aztecs. The Spanish conquerors
acquired the taste for chocolate and carried it back to
Spain where it has become one of the most popular
national drinks.

But cacao culture, like that of coffee, is not confined
to any single region of the globe, and the growth of
the bean has spread to tropical countries the world over.
Important sources of supply outside of America are
the Portuguese, British and German colonies of the
West African coast and Ceylon. In America, two re-
gions have about equal claim to first place. One is the
country stretching from eastern Brazil to Ecuador,
the active production being principally in the Atlantic
and Pacific coast provinces. The other region is the
territories rimming the Caribbean.

There are curious currents and cross currents of trade
in the cacao as in the coffee industry. Though the
United States gets so large a proportion of its coffee
from Brazil, it takes less than one-fourth of her cacao.

CARIBBEAN PRODUCTS

271

World's Production of Cacao — 1911

(Compiled from Cocoa Production and Trade, Special Consular Reports, No. 50,

Washington, 1912)

Caribbean Region

Country

Pounds

53,351,825

39,683,200

44,092,400

Grenada

13,227,700

Haiti

5,511,510

4,850,925

Jamaica

6,172,900

French Colonies *

3,527,375

Cuba

3,306,910

Dominica

2,425,060

St. Lucia

1,543,235

Costa Rica

440,925

Total

178,133,965

Countries of South America, Not Above Listed

Ecuador

88,846,285

Brazil

85,980,300

Total

174,826,585

Other Countries

San Thome and Principe .

Gold Coast

German Colonies

Ceylon

Lagos

Dutch East Indies

Fernando Po

Belgian Kongo

Other countries 2

Total.

73,854,810
77,161,800
11,023,100
9,479,885
8,377,580
6,613,900
6,613,900
2,204,600
3,526,860

198,856,435

Grand Total 551,816,985

1 Includes small amounts from non-Caribbean French Colonies.

2 Includes all Caribbean units except those entered above.

272

CARIBBEAN INTERESTS

Venezuela sends somewhat less than two-thirds of her
cacao crop to France; the Dominican Republic sends
hers chiefly to the United States. The colonies, with few
exceptions, market their crops predominantly in the
home country. Trinidad, however, sends largely to the
United States.

The United States is the greatest cacao-consuming
country, taking about one-fourth of the world's pro-
duction for export. Its principal sources of supply of
cacao are the British West Indies, chiefly Trinidad, with
the Dominican Republic, Brazil and Ecuador furnishing
about equal amounts of the remainder. The amounts
taken from American countries are indicated in the fol-
lowing table:

Imports of Cacao from American Countries into the United States — 1913-141
Caribbean and Mexico

Country

Pounds

Value

Costa Rica

73,316

121,547

3,509

962,292

39,672,729

3,427,405

2,818,188

2,245,943

26,782,966

139,528

4,051,868

4,003,464

$9,525

Panama

12,637

1,051

102,660

Trinidad and Tobago

4,891,574

Other British West Indies

378,093

Cuba

326,642

Haiti

218,947

The Dominican Republic

3,187,006

16,864

Dutch Guiana

473,883

Venezuela

552,547

Total

84,302,755

$10,171,429

South America

Brazil

25,870,186
26,319,735

$2,764,766

Ecuador

2,693,674

Grand Total

136,492,676

$15,629,869

1 Trade of the United States with Other American Countries, 1913-lb, Miscel-
laneous Series, No. 23, Washington, 1914:

CARIBBEAN PRODUCTS 273

Various influences tend to show that the interest of
the United States in this industry will increase. (1)
Chocolate consumption in the United States is rapidly
growing. (2) The fact that cacao plants in America
have generally been free from the diseases which have
cut into profits of the English plantations in the Gold
Coast make the crop one the production of which will
attract capital so long as the demand continues to keep
ahead of the supply, as it has in recent years. This
freedom from blight gives an advantage to cacao pro-
duction, as compared to banana raising which has been
seriously interfered with by disease in recent years,
especially in Costa Rica. (3) Further, cacao produc-
tion does not require a large capital outlay, a great ad-
vantage it has over both sugar and banana raising. To
be sure, there are some huge plantations, such as the
100,000 acres of the Caamano Tengel Estate in Ecua-
dor, but the industry is one that is well adapted to de-
velopment on a basis of small holdings. This will make
it easier to induce capital to enter the business, and to
the extent that the plantations remain in the hands of
residents it will bring a wider popular interest in the
maintenance of order than is usually the case where
great estates predominate. (4) The Caribbean region
in which cacao can be grown is large. Companies, in
widely varying districts which have suffered from
banana blight, have found the crop can be substituted
without difficulty.

To summarize the relation of the United States to
the economic development of the Caribbean, we should
hold in mind the following facts:

274 CARIBBEAN INTERESTS

1. Every industry of great importance in the Carib-
bean finds the United States the greatest buyer of the
commodity it produces. The United States distances
all the great commercial coimtries of the world as an
importer of sugar. The annual per capita consumption
in this country is 86 pounds. It has risen every decade
since 1830 and between 1900 and 1915 increased from
58.9 pounds to 86 pounds, or over 43 per cent.1 These
figures speak conclusively for the continuance of the
interest of the United States in Caribbean sugar, and
for Caribbean solicitude for its great northern market.

The United States is the world's great consumer of
coffee. It takes half the world's crop. Its per capita
demand is greater than that of any other important
commercial nation. It consumes over a fourth of the
world's cacao and its demands are rapidly rising. In
the Caribbean fruit trade the United States market is,
with a trifling exception, the only profitable one. Carib-
bean iron mines export ore practically exclusively to
the United States. We shall be the great market for
their petroleum as we are for that of Mexico at present.
Not a single important Caribbean industry has been
developed or gives promise of developing the success
of which is not closely linked with the economic inter-
ests of the United States.

2. The Caribbean is the natural region for the invest-
ment of surplus American capital. Railways, asphalt
concessions, sugar, coffee, tobacco, cacao plantations,

1 These figures are based on the statistics of T. G. Palmer,
Sugar at a Glance, Sen. Doc. 890, 62nd Cong., 2nd Sessv Wash-
ington, 1912, and Commerce Reports, Oct. 8, 1915.

CARIBBEAN PRODUCTS 275

mines, port works, municipal improvements have already
been financed by American capitalists and are likely to
be in the future to an increasing extent.

Quite aside from the purely political factors deter-
mining the relation between the United States and the
Caribbean, it is self-evident that the economic advan-
tages of both will create for them an ever greater iden-
tity of interest.

CHAPTER XVI

THE INTERNATIONAL IMPORTANCE OF THE
BANANA TRADE

To those in world trade names of countries and re-
gions suggest their products. It has always been so.
The East Indies four hundred years ago meant spice;
two hundred years ago China meant silks and tea;
Canada meant fur. The Caribbean to Queen Elizabeth
meant gold — it was the route of the treasure ships of
Spain — to Washington it meant sugar and molasses,
and to our children it will suggest bananas.

New foods often make their way slowly, especially
among older nations. The English are still behind the
Scotch in their appreciation of the value of oats for
human food; the potato came into its Own in Germany
only in the second half of the nineteenth century and
Europe still looks upon maize as fit nourishment only
for the lower animals and the poor. But even preju-
dice yields to proof. The development of the banana
market illustrates both conservatism and its overthrow.

America only, among the important commercial
countries of the globe, realizes the value of this new
food. Location rather than adaptiveness, till recently,
explained the fact. When refrigeration was unknown
and fast steamships for freight service still a thing of the
future bananas could be marketed only within areas

276

THE BANANA TRADE 277

easily accessible from the regions in which the fruit was
produced. Large quantities grew wild, enormous
amounts were consumed locally, but the surplus either
went to waste or was used to fatten pigs, as is still the
case with the inferior product. Even in the United
States, until a generation ago, the banana was a fruit
counted a luxury rather than a valuable food. The be-
ginning of the banana trade was made in 1866 by Mr.
Carl B. Franc * who imported on a small scale from the
Panama region to New York. For some years he had
a virtual monopoly on the Philadelphia and New York
market but his enterprise did not develop permanence,
and the credit for making the banana a feature of our
fruit markets belongs to another pioneer, Captain Lo-
renzo D. Baker. In 1870, on returning to Boston from
a trip to the Orinoco, he called at Port Morant, Ja-
maica, for a cargo of bamboo for paper making and
carried back a few bunches of bananas, then a curiosity
in the New England markets. The venture proved
profitable and the captain thereafter made several trips
a year to Port Antonio, Jamaica, on a small schooner
of 120 tons, the Eunice P. Newcomb, to take cargoes of
bananas to Boston. Later the firm of L. D. Baker and
Company was formed to prosecute the trade, which in
time was reorganized as the Boston Fruit Company and
finally as the United Fruit Company. Meanwhile, of
course, other companies have entered the field.

How important the trade has become is illustrated by
the figures of exports. In 1911, there were sent from

1 Adams, F. U., Conquest of the Tropics, New York, 1914, pp.
35-36.

278

CARIBBEAN INTERESTS

Caribbean countries in the export trade, 50,288.585
bunches, which on the average of 140 bananas to the
bunch, represents a total of over 7,000,000,000 bananas.
We now import annually about sixty-five bananas for
each man, woman and child in the Union.1 The chief
sources from which they come are indicated by the fol-
lowing table:

Chief Sources of the Banana Supply of the United States — 1914 *

Country

Bunches

Jamaica

15,676,864

Honduras

8,433,895

Costa Rica

5,398,930

Panama

5,690,300

Cuba

2,354,395

Nicaragua

1,828,200

Guatemala

3,338,510

Colombia

2,262,828

Mexico

2,697,272

British Honduras

742,925

The Dominican Republic

248,115

* Compiled from Trade of the United States with Other American Countries,
1913-U, Washington, 1915.

The world's supply in 1911 as shown by the consular
returns was : 2

Country of Origin

Bunches

The Dominican Republic . .
Mexico (Frontera Province) .

Honduras ,

Costa Rica

Jamaica

Colombia ,

Panama

Canary Islands

Cuba

Nicaragua ,

Guatemala

British Honduras

Dutch Guiana

Others

404,000

750,000

6,500,000

9,309,586

16,497,385

4,901,894

4,261,500

2,648,378

2,500,000

2,225,000

1,755,704

525,000

387,516

250,000

Total.

52,936,963

1 In 1914, continental United States alone consumed 48,683,592
bunches or about 6,800,000,000 bananas.

2 Daily Consular and Trade Reports, Dec. 26, 1912.

THE BANANA TRADE 279

Two facts appear from these figures : With the excep-
tion of the Canaiy Islands, all the countries producing
large quantities of bananas for export border the Carib-
bean, and of those exported the United States con-
sumes many times as much as any other country and
far more than all the rest of the world combined. Even
with us the great increase in banana consumption comes
in recent years.1

European countries are now coming to appreciate the
new food; in fact, the most rapid increase of consump-
tion and the best prices are now received there rather
than in the United States.

The world is just awakening to the value of the
banana as food. The acreage devoted to banana grow-
ing is being rapidly increased. This can be easily done
for the areas suitable have as yet only been touched.
Improved refrigeration and quick steam service will con-
tinue to widen the area in which the product can be mar-
keted, and besides its present use as a fruit it will be
used as it now is in the tropics, where it is boiled green
as a vegetable and manufactured into a variety of by-
products, among which are a confection known as
"banana figs," banana flour and banana vinegar. These
may become the basis for the industry in areas too dis-
tant to profit by the demand for fresh fruit. If present
development continues, it will be an important factor in

1The value of imports was $5,877,885 in 1900; $9,897,821 in
1905; $11,642,693 in 1910; $14,368,330 in 1912 and $16,397,844
in 1914.

Monthly Summary of the Foreign Commerce of the United
States, June, 1915, p. 1000. In the year ending June, 1915, the
total fell to a value of $13,512,960.

280 CARIBBEAN INTERESTS

raising the Caribbean region from its present none too
stable economic condition to one in which it will occupy
a secure position as a region from which an important
article of the world's food supply will be drawn.

But the development will have consequences not
merely economic. Plantations represent capital which
will demand protection from disorder. The economic
importance of banana exports is not now comparable
to that of sugar in the Caribbean region, but in the need
of protection to investment the banana plantations oc-
cupy a position greater than their value would indicate,
for whereas sugar production occurs in the Caribbean
chiefly in its stabler communities, the principal banana
regions, with the exception of those in Jamaica, are in
weak states. The introduction of capital, however, be-
sides increasing the duties in the keeping of order con-
tributes to the solution of that problem. It increases
the national wealth in furnishing a larger basis for the
creation of national income by which orderly progress
can be assured. Further, with steady work and larger,
stabler income, the wants of the people will expand,
giving them greater interest in the maintenance of the
order which makes the satisfaction of those wants pos-
sible.

Moreover, an immediate consequence of the develop-
ment of the direct trade with Europe, now just begin-
ning, is to threaten the supremacy of the United States
in some of the Central American markets. People buy
their goods, other things being equal, in the countries
where their own products find their best sale. If im-
proved transportation facilities for the banana trade

THE BANANA TRADE 281

develop between the Caribbean and European ports, it
is but natural that more European manufactured goods
will seek market there.

Direct shipments have been established already
through the banana trade by the United Fruit Company
and the Hamburg-American line between European
ports and Mexico, Jamaica, Honduras and Costa Rica.
Already our Central American consuls have warned us
of the coming competition which we must expect in that
region from the new direct outlets for French, German
and English trade.

We have been fortunate heretofore because, especially
in some of the regions of Central America and in Ja-
maica, we have been practically the only great buyer of
the most important product of the country. If present
developments continue, however, this advantage along
with our favored conditions of transportation will dis-
appear.

CHAPTER XVII

OIL ON THE CARIBBEAN

Almost unnoticed, the conditions which underlie sea
power are undergoing a revolution. The nineteenth
century saw the abandonment of the wind-driven craft
upon which the world had relied since the beginning of
history in favor of vessels propelled by coal and steam.
The twentieth century promises a change no less re-
markable. Coal as fuel is rapidly yielding place to
petroleum and gas-driven motors seem about to crowd
out the steam engine.

The change to oil as fuel for large ships is already
in progress. Almost all large vessels whose routes carry
them near oil fields are being fitted to use petroleum
instead of coal. The change from the steam engine to
the gas motor is coming more slowly. The crude-petro-
leum-consuming motor has only recently emerged
from the experimental stage, but it seems highly
probable that in a few years it will play an important
part in both the merchant marines and navies of the
world.

There are already in operation motor-driven Danish
merchantmen of 7,000 tons, "sailing" in the Far East-
ern trade, and two German firms are building vessels
of this pattern which will register 10,000 tons. But

even if the motor-driven liners and battleships never

282

OIL ON THE CARIBBEAN 288

come or are delayed, the oil-driven liners and battle-
ships are present-day facts.

The nation which controls the oil supply possesses
one of the great factors upon which ocean-borne com-
merce will depend and about which naval policies will
turn. Most fortunate of all is the nation which controls
oil supplies which lie near the points where the world's
great trade routes cross. In time of peace such re-
sources will find a ready market, and in time of war they
will prove possessions of greatest strategic importance.

The public has not realized the steps already taken
by the great naval powers to prepare for the shift to
oil as a fuel for their battleships. All the battleships
of the American Navy built in the last eight years use
oil for fuel, eight use it as auxiliary to coal, four use it
exclusively. In 1915, the first two battleships of the
dreadnought type, the Oklahoma and the Nevada , using
oil exclusively for fuel, were added to the Navy. Forty-
one of our destro}^ers built or building use oil fuel only.
Storage facilities are being proportionately increased.
Oiling stations are replacing coaling stations. In 1912
steps were taken for construction of fuel oil tanks at
Pearl Harbor, Hawaii; Melville, R. I.; Norfolk, Vir-
ginia; Charleston, South Carolina; and Key West, Flor-
ida. Five tanks are already in use at Guantanamo,
Cuba. The combined capacity of all these is 3,890,000
gallons.1 The amounts used by the Navy are steadily

1 Annual Report of the Navy Department, 1912, p. 37, and
Report of the General Board, published in Annual Report of
the Secretary of the Navy, for the Fiscal Year 19 H, Washing-
ton, 1914, p. 60.

284 CARIBBEAN INTERESTS

increasing.1 Our present oil-burning fleet would re-
quire 23,000 tons of fuel oil to keep it in active service
for a single month. "Henceforth," announces Secretary
of the Navy Daniels, "all the fighting ships which are
added to the fleet will use oil, and the transition from
coal to oil will mark an era in our naval development
almost comparable with the change from black powder
to smokeless powder for our guns." 2

But more significant is the recently announced inten-
tion of the British Admiralty that all British warships
to be built from now on will use oil for fuel exclusively.
This action is one which will almost certainly be fol-
lowed by other naval powers. The performance of the
oil-driven vessels in the European War has been espe-
cially satisfactory. The great super-dreadnought
Queen Elizabeth, which did such effective work in the
Dardanelles, is entirely oil-driven and shows that the
use of this fuel is not limited by the size of the vessel.
The success of this and other experiments has led the
British Government during the course of the war to con-
vert the Royal Sovereign to the oil-fuel basis.3

The change in the propelling power of our ships of
war and peace marks the beginning of a new chapter
in marine affairs. It is especially significant for the
great naval powers — a fact which has not escaped their
attention. Curiously enough, the oil wealth of the world

1 Annual Report of the Navy Department, 1912, p. 206 and
Report of the General Board cited above.

2 Annual Report of the Secretary of the Navy, for the Fiscal
Year 191 Jf, Washington, 1914, p. 13.

3 See Speech of Winston Churchill reported in London Times,
Feb. 16, 1915, p. 10.

OIL ON THE CARIBBEAN 285

lies very largely in the hands of nations which are either
outclassed in the naval competition, or are peculiarly
hampered by circumstances. This is, of course, ex-
plained by the fact that oil resources were unknown or
unappreciated at the time when the treaties determin-
ing the ownership of the regions in which they lie were
made. In any great war in which control of the sea
becomes a major issue their continued possession by the
weaker powers can hardly fail to be called in question.
Only the practically complete control of the sea by one
group of powers has prevented the raising of the issue
in the present conflict. For this reason, the possession
of oil resources still remains as it was when the conflict
broke out.

The facts of the situation at present are these : The
greatest oil wells of the Far East are in the Dutch East
Indies, the greatest in the Near East lie in Russian ter-
ritory near the Caspian. Russia is a great power, but
for historical reasons she has never been a naval power
of the first importance. Next in importance among
European wells are those in Roumania. The great oil
fields discovered in the New World have, until recently,
been almost exclusively in the United States. Curiously
enough, therefore, the developed oil resources are con-
trolled by non-naval powers with the exception of those
held by the United States, the product of which, in 1912,
was three times that of the Russian fields and more than
a hundred times that of the Mexican region, the two
nearest competitors.

But what of the oil regions which may be discovered
in the future? In whose territory will they lie and to

286 CARIBBEAN INTERESTS

whose commercial and naval strength will they con-
tribute ? It needs no argument to prove that every naval
power will be eager to explore and develop its own oil
resources and to get control of any other source of sup-
ply possible.

It is from the latter point of view that oil develop-
ment becomes of great interest to the Government of
the United States. Owning the most productive oil
fields yet discovered in the world, there is no question
of the adequacy of our supply to meet any demand
which may be made upon it for naval purposes, but the
control which might be secured by other powers over
oil regions lying in or near districts in which we have
important interests must necessarily be for us a matter
of great concern.

In no region of the world is the importance of this
question so great to the United States as in the Carib-
bean countries. In no region of the world, too, are
there better prospects for the discovery and development
of important oil resources. In fact, from Tampico to
Trinidad there is a group of countries which, it is as-
serted, promise better for oil development at present
than any similar area in the world.

Oil development in the Caribbean is still in its infancy.
It began hardly fifteen years ago, but there seems to
be every reason to believe that there will develop close
at hand a cheap, unexcelled fuel supply to serve the rap-
idly increasing commerce of the region.

The opening of the Louisiana and Texas oil fields
had created a desire to explore the possibilities in Mex-
ico long before active steps were taken to do so. The

OIL ON' THE CARIBBEAN 287

existence of oil in the country had long been known. It
is said the Aztecs used the petroleum which oozed from
the soil near Tampico in the ceremonies of their temples,
but no serious attempt was made to bring the deposits
to commercial use till about 1900. Then a Mr. Doheny
of San Francisco visited the Tampico region, and on his
return organized a company of local capitalists to exploit
the "new" oil region. The product, at first, was poor
and could be used only for fuel, but as development
progressed better grades were discovered. Soon the
Mexican National Railways adopted oil as fuel for their
engines. The Waters Pierce Oil Company, at that
time in high favor with President Diaz, got extensive
concessions. The English firm, S. Pearson and Son,
Limited, became interested and Mexican oil production
started on a rapid increase.

In 1900, the country was practically unknown among
oil-producing regions. In 1907, it produced a million
barrels; in 1912, about sixteen million; in 1913, twenty-
six million. There were thirty companies operating,
and since then Mexico has ranked next after the United
States and Russia in total oil production. The towers
of the Tampico-Tuxpan region make a landscape com-
parable to the busiest sections of the Pennsylvania fields
in their most active days. Some of the wells have been
producing at unprecedented rates. The largest gusher
near Tampico, known as "Potrero del Llano No. 4,"
flowed 120,000 barrels a day for over three months be-
fore it was finally capped. No other single well, of
which there is record, has equaled this performance.1

1 For recent Mexican developments, see Daily Consular and

288 CARIBBEAN INTERESTS

How great the Mexican oil resources may prove to be
can only be conjectured. If conservative estimates are
to be relied upon, oil, within the next generation, will
prove a greater source of wealth for the country than
her gold and silver mines ever were. The oil fields of
the United States, which have played so important a
part in the industry, cover a combined area of 8,300,000
acres. Those of the Tampico-Tuxpan region alone
cover 5,000,000 acres and their possibilities are only be-
ginning to declare themselves. Nor are these fields
the measure of those found in Mexico. Other regions
where oil is known to exist have as yet not been opened
to exploitation and their possibilities are unknown.

Central America has no important oil development
though the prospects there are declared to be highly
promising. Engineers are already prospecting in the
six republics and the great oil interests are asking con-
cessions to cover whatever oil wealth they may discover.1

But the fields that now excite the greatest expectation
and interest lie still farther south. Beyond Panama lie
unexploited oil regions which, judging by their extent
at least, promise to do more perhaps than even the Mexi-
can fields to make the Caribbean a center of world inter-
est. These prospects lie in the two republics of northern
South America, all within easy distance of the sea and
of a combined extent greater than the area of the Re-

Trade Reports, t)ec. 26, 1913, and Commerce Reports, Feb. 4,
1915; March 3, 1915; March 12, 1915; Oct. 22, 1915.

1 Details of these projects are given in Engineering and Mining
Journal, Jan. 10, 1914, and in Daily Consular and Trade Reports,
Oct. 3, 1913, and in various issues of the Pan-American Bulletin,
1913-14.

OIL ON THE CARIBBEAN 289

public of Panama. The most promising districts are
in Colombia. One lies along the coasts of the Gulf of
Darien close to the Panama boundary line, another is
between the Atrato River and the Pacific, thus furnish-
ing possibilities of supplying fuel to vessels on the west
coast of South America. This field is almost a: close
to the canal on the Pacific side as the first is on the
Atlantic. The other fields, greatest of all in extent,
lie in the valley of the Magdalena River not too far dis-
tant from the sea to be reached by pipe lines, but capa-
ble also of being reached directly by water transport.

The oil resources of the neighboring republic, Ven-
ezuela, have not yet been determined. Since 1912 "one
American company has maintained a large corps of
engineers in various parts of the country making expert
examination of oil and asphalt prospects." 1 The Gen-
eral Asphalt Company of Philadelphia is reported to be
making extensive survej^s. Twelve parties were re-
ported as in the field, each with a geologist in 1913, and
developments of a substantial character were started
by the Venezuela Oil Concessions, Limited, a British
concern, with a concession covering 3,000 acres.2 Off
the coast of Venezuela lies the British island of Trini-
dad in which earnest efforts are being made to develop
oil wells. Although the industry is just beginning, 147
wells have been drilled of which 41 were sunk in 1914.
Of these, 18 were productive.3 Nine different com-

1 Daily Consular and Trade Reports, Oct. 24, 1913.

2 Engineering and Mining Journal, Jan. 10, 1914.

3 Engineering and Mining Journal, Jan. 9, 1915, p. 125. The
output in 1914 was 563,000 barrels.

290 CARIBBEAN INTERESTS

panies are drilling for oil in the southern half of the
island. Two companies are to erect refineries and the
British Admiralty is prepared to purchase there a por-
tion of the Navy's fuel oil.1

The importance of the control of oil as a factor in the
international politics of the Caribbean can hardly be
overemphasized. It may not only mean the dominance
of the resources which determine the economic growth
of the republics and colonies of the surrounding coasts,
but it will have an important effect on the marine poli-
cies and therefore on the political influence of the coun-
tries competing for position in naval affairs.

The control of oil resources is not an economic prob-
lem only, such as is presented by concessions granted for
the building of lighting plants, street railways, mines,
or even great railway trunk lines. Oil concessions like
these, when granted to foreigners, are likely to raise
questions of the extent to which the rights of foreign in-
vestors will be protected by force by their home coun-
tries. But it may be not only this vicarious and indirect
interest which the foreign power will feel in defending
its subjects' oil wells; every great nation, which feels
that the control of oil measures its international mercan-
tile and naval power, will be prompted to support its
subjects in ways and degrees which may make our pre-
vious disputes over asphalt grants and railway conces-
sions insignificant in comparison.

The Government of the United States will not be slow
to see the importance of the oil supplies in the neigh-
boring republics as an influence on her own foreign

1 Daily Consular and Trade Reports, Nov. 5, 1913, p. 657.

OIL ON THE CARIBBEAN 291

policy. Our interests in this matter have thus far been
brought into contrast with those of only one other power,
but the general policy which we may adopt will have a
much wider application. So far as a supply for our
own governmental needs is concerned, no question is
apt to arise, but the degree to which other nations may
get de facto control of Caribbean oil resources may be
for us a matter of great importance.

The attention of the Foreign Offices of at least two
great nations has already been called to the importance
of protecting oil properties. The great English con-
tracting firm, S. Pearson and Son, Limited, have impor-
tant holdings in Mexico. Since the United States re-
fuses to allow other countries a free hand in dealing
with Latin-American countries, this corporation de-
mands that the United States itself assume the respon-
sibility of protecting the property of foreigners. The
holdings are of interest to our State Department, not
only because of their economic importance, but because
of the long-time contracts which the company has with
the British Admiralty for the supply of fuel oil for
British battleships.

These factors force the United States to consider
again the interpretation which is to be placed on the
Monroe Doctrine. The control of oil resources may
mean a shift in military power in the Caribbean which
would make the defense of the established American
policy increasingly difficult.

Where the Caribbean oil regions lie within the limits
of European colonies they stand in the same position
as other resources so far as the United States is con-

292 CARIBBEAN INTERESTS

cemed. Our State Department could raise no objec-
tion to their development by whatever means seemed
best to the owners. Technically, the same would be
true of the regions lying in the Latin Republics. De
facto , the United States cannot view the auspices under
which the development occurs there with indifference.
Especially is this true when the interests of the cor-
poration doing the work would be closely allied to the
military interests of the home country.

In fact, the oil holdings of the Pearson syndicate in
Mexico seem already to involve a situation the duplica-
tion of which the United States may well think to its
interest to forestall. In the hands of other than British
nationals there is no doubt that these oil holdings would
already be a source of anxiety. If, for example, the
development had taken place under a Japanese cor-
poration and had occurred on the west instead of the
east coast there is little doubt that a great outcry would
have been raised in this country.

The recent attempt of the Pearson syndicate to extend
its oil holdings to the undeveloped fields of Colombia
illustrates both the sensitiveness of American public
opinion and the deference paid to it by the English
concessionaires. The application for a concession in
Colombia is reported to have included the right to pros-
pect for oil anywhere in the public domain in a region
covering 10,000 acres. Permission was to be granted
to build pipe lines, railways, canals, docks, storage ware-
houses, refineries, power plants, telephones and tele-
graphs.

The extensive properties which could be acquired

OIL ON THE CARIBBEAN 293

under such an arrangement, especially the oil-loading
facilities, which from the nature of the business would
have been built, would have made the seaport where the
products of the enterprise were shipped little less than
a naval base. In view of the company's close connec-
tion with the British Navy, the United States could
hardly fail to consider the concession one which seriously
affected its interests. Of course, Great Britain is free
to establish coaling or oiling stations in Trinidad just
as she is free to fortify the Bahamas, but an extension
of British control to the source of supply in countries
not now under control could not but be unfortunate
from the American viewpoint. A similar grant to other
nations would have been even more objectionable to the
American public. If the grants were confined to Brit-
ish companies there might be little real reason for alarm,
for a war between the Anglo-Saxon peoples is unthink-
able and British control would at least mean neutral
control. But if the grants to one power were unobjec-
tionable no exception ought to be taken to concessions
to other powers.

Fortunately, the proposed concession to the Pear-
sons now appears to be dropped. It was granted by
the Ministry and approved by President Restrepo in
April of 1913, but the Colombian Senate declined to
ratify the action and the Pearsons have announced that,
due to the criticism by American public opinion, they
will not press the matter further. As a result, Great
Britain has turned elsewhere to assure her Navy an oil
supply. The failure of the proposed Colombian grant
and the uncertainty of the supply from Mexico resulted

294 CARIBBEAN INTERESTS

in an agreement by First Lord Winston Churchill with
the Anglo-Persian Oil Company. By this contract the
Admiralty, it is reported, acquired for £2,000,000 a
controlling interest in the company's wells in two
provinces of Persia.

Straws show which way the wind blows. Many peo-
ple in the United States thought the Lodge Resolu-
tion concerning Magdalena Bay, when it passed, an
unnecessary affront to a friendly nation and an un-
warranted and inadvisable extension of the Monroe
Doctrine. Recent developments may show that the
policy of the United States must be a frank avowal of
the principles of the Resolution, if the Monroe Doc-
trine is to keep its substance and not become only a
form.

In any case, we must realize that the development of
the oil fields of the Caribbean is essentially unlike the
development of other national resources. Oil is a po-
litical, as well as an economic factor, in the development
of the region which is necessarily the most important
sphere of interest to the United States.

CHAPTER XVIII

BIG BUSINESS AND THE CARIBBEAN

Intensive development of national resources is not a
characteristic of the Caribbean. The exploitation of
natural wealth there, as in South America, is as a rule
superficial. Attention has been concentrated on the few
sources of wealth which bring quick and easy returns.

For this condition there are many reasons, affecting
different regions in various degrees. In some cases,
the principal obstacle has been disturbed political con-
ditions, and often mistaken fiscal policies have retarded
development. The lack of an adequate and reliable
labor supply has been another handicap. A more gen-
eral difficulty, largely rising out of the causes men-
tioned, has been the lack of capital willing to invest.
In our day no country can reach the position it should
in the world's commerce unless it has within its bor-
ders, or can attract from abroad, the necessary money
for the development of its resources.

The capital, which in recent years has sought invest-
ment in the Caribbean, has been to a large degree not
in the hands of small holders, but controlled by great
corporations. These have started their activities in the
development of a single product which from its nature
it might be impracticable or impossible to handle with
small capital. Theirs were enterprises which, handled

295

296 CARIBBEAN INTERESTS

on a large scale, would bring great profits. Though
some industries have grown remarkably under the stim-
ulus furnished in this way, that growth has distracted
attention from other lines of development, which may
contribute largely to the future prosperity of the
region, and may form the basis for a stabler citizen-
ship.

An illustration of the advantage reaped when ex-
ploitation is in the hands of large organizations is given
by the production of asphalt. In this case, of course,
the position of the deposits of itself favored a concen-
tration of ownership. They were so localized that their
operation could be made most profitable only when the
working of the entire area could be coordinated under
a single management. Refining machinery demanded
larger outlays than could be made by local capital.
The marketing could be done best in large quantities,
especially when, as formerly, the product was carried
to vessels into the holds of which the raw material was
dumped, there to lie compacting itself until again
"mined out" at the port of delivery.

The industry in the Caribbean is now dominated by
a single company which controls both the Bermudez
Asphalt Lake in Venezuela and the Trinidad Asphalt
Lake.1

The fruit trade has undergone a similar development.
Production to some extent may be left in the hands of
small planters and a minor part of the total amount

1 See Annual Report to the Stockholders of the General Asphalt
Company, for the Fiscal Year Ending April 30, 1914, Philadelphia,
n.d.

BIG BUSINESS AND THE CARIBBEAN 297

marketed is still thus grown ; but the work even in this
stage of the industry is more efficiently performed by
aggregations of capital which can assure a steady sup-
ply and transportation facilities that can be depended
upon. The small planter must ordinarily market his
fruit by sending it to tidewater or to the railroad on
mule back. The large company can build branch rail-
roads to its plantations and ship the product at a frac-
tional part of the cost of animal transportation. In
this manner it can exploit regions which otherwise lie
too far distant to allow their profitable cultivation.

If the steamer cannot berth at a dock, the small pro-
ducer is at a disadvantage because he cannot buy a
lighter nor build the necessary landing pier. In most
of the Caribbean banana regions, too, the public au-
thorities cannot, or at least do not, furnish him with
these facilities. Shipments to foreign countries cannot
take place in the ordinary cargo vessels. Specially
constructed steamships with refrigerating appliances
are necessary to keep the product from ripening too
rapidly. As a result of these conditions the export of
fruit in the Caribbean has come to be almost entirely
controlled by a few large concerns, the pioneer com-
panies. They grasped the opportunity to stake out ex-
tensive claims for future development. The largest of
these corporations early realized that there are on the
Caribbean coast of Central America few natural har-
bors. Trujillo, Honduras; Puerto Barrios, Guatemala;
Puerto Limon, Costa Rica; and Bocas del Toro, Pa-
nama, are the best. Its agents bought extensive tracts of
land where access to deep water was easy and where rail

298 CARIBBEAN INTERESTS

termini were sure eventually to be located. They paid
only a nominal price for what was then fever-infested
jungle, inhabited by a few scattered Indians. Another
advantageous location of port and banana lands was
found farther south at Santa Marta, Colombia. Pur-
chases were made there, also. Still later extensions were
made in the Dominican Republic and Jamaica.

One company chiefly engaged in the exploitation of
the banana trade claims, with its allied interests, to have
expended $200,000,000 in the American tropics.1 It
reports its resources devoted to Caribbean development
as $88,867,408.27.2

Developing an industry in the American tropics such
as this involves an undertaking of responsibilities, usu-
ally borne by state and municipal authorities. In fact,
a large exploitation company in the Caribbean ap-
proaches the position of a state within a state. Any
government in the territories taken over was often
practically non-existent. There were no efficient po-
lice, no roads, no stores, no laborers, no towns, no sani-
tation systems. The company must keep order ; it must
build roads; it must build and maintain stores; found
and build towns, install sanitation systems, and generally
assume, or have authority delegated to it, that would be
dangerous in any ordinary "democracy."

The story of Central American railroads is similar.
Railroad contracts have been the source of much trou-

1 Adams, F. U., Conquest of the Tropics, New York, 1914, p.
166.

2 Fifteenth Annual Report to the Stockholders of the United
Fruit Company, 1914.

BIG BUSINESS AND THE CARIBBEAN 299

ble to these weak republics; but railroads are essential
also to make them prosperous. The east and west
coasts of Central America, without railroads, are almost
as far apart, when the danger to human life involved
in a "transcontinental" journey is considered, as was
the Middle West from California in the early fifties
of last century. Their markets are as inaccessible as
those of California were, and the chances of sectional
disagreements and disorders greater. Gradually rail-
way connections are being established. Often the ex-
tensions are to give service to fruit plantations, or are
financed from the west coast inland by hypothecating
the export tariff upon the coffee crop. Hundreds of
miles are private lines on which all traffic, except fruit,
is of negligible importance. Even where a railway is
publicly owned, as in the case of the Costa Rica Rail-
way, it is frequently operated by a foreign corporation.
In Costa Rica there are reported to be 402 miles of
railway.1 A single company counting lines owned and
operated controls 387.75 miles.2 In Honduras one cor-
poration owns 134.21 miles of railway.3 There are re-
ported to be 174 miles in the Republic.4 The Central
American railway system, as a whole, is apparently
more and more coming to be under the control of the
corporation known as "The International Railways of

1 Statistical Abstract of the United States, 191£, Washington,
1915, p. 690.

2 Fifteenth Annual Report to the Stockholders of the United
Fruit Company, 1914.

3 Ibid.

4 Statistical Abstract of the United States, 191£, Washington,
1915, p. 690.

300 CARIBBEAN INTERESTS

Central America," of which the moving spirit is Mr.
Minor C. Keith, one of the pioneers in the development
of the Central American fruit trade.1

The sugar industry also illustrates the tendency to-
ward concentration of control. It has never been a
small owner's business. The conditions of its produc-
tion have been favorable only to the man with large
capital, even when very great capital is not needed.
This is true under the free labor system as well as un-
der slavery. It has become more marked in recent
years with the replacement of old processes in which the
wind had to be relied upon to furnish the power to
grind the cane, and sun-dried grindings were the fuel
for evaporating the surplus water in the juice. The
forced draft furnaces, which now burn the cane fresh
from the rollers, furnish power for the grinding and
heat for the vacuum pans, represent at once a more
economical method of production, one with which the
wind-driven mills of former generations cannot com-
pete, and one which the small producer cannot afford.

The advantages of organizations with large capital
are shown by the developments in the sugar industry
of Cuba. There is in the island an investment of at
least $50,000,000 in sugar mills and lands by American
capitalists alone.2 Though Cuba produced sugar worth

1 See Forty-First Annual Report of the Council of the Corpora-
tion of Foreign Bondholders, London, 1915, under the discussion
of the various countries; Adams, F. U., Conquest of the Tropics,
New York, 1914, p. 196, et seq.; and Daily Consular and Trade
Reports, Sept. 8, 1914.

2 Daily Consular and Trade Reports, July 11, 1911. The hold-
ings of a single company in plantations and mills are valued in

BIG BUSINESS AND THE CARIBBEAN 301

approximately $240,000,000 in 1914, only 172 estab-
lishments were reported as engaged in the industry.1
The Chaparra mill at Puerto Padre produced in 1914,
195,000,000 pounds of sugar, and a sister establishment,
Las Delicias, some seven miles away, produced the
enormous total of 325,000,000 pounds.2 The sugar de-
velopment of the Dominican Republic was reported in
1911-12 as in the control of only fourteen estates. 3

In securing labor the small producer has to rely
principally on the local supply. The large company
may, as is the case on the west coast of Central Amer-
ica, import better labor from other parts of the Carib-
bean or even from the Far East. The latter has been
done by the Governments of Trinidad and British
Guiana to the great benefit of the owners of the sugar
estates. These imported laborers once introduced into
the country may at the end of their contracts go to
work where they will, a practice which is marked among
the East Indians introduced in the British colonies.
But the advantage of indentured labor is greater for
the men with large capital than for those with small
holdings.

A review of the tendencies which are leading to in-
creased emphasis upon great capital as an element in

its annual report at a book cost of $8,473,788.47. See Sixteenth
Annual Report to the Stockholders of the United Fruit Company,
for the fiscal year ending September 30, 1915, n.p. n.d.

1 Cuba, Reno, Geo., Havana, 1915. In 1915, 170 estates are
reported as operating. Commerce Reports, Sept. 29, 1915.

2 Cuba, Reno, George, Havana, 1915.

8 Diplomatic and Consular Reports, British, 1912-13 [cd.
6006-212], Sept. 29, 1915.

302 CARIBBEAN INTERESTS

the development of the Caribbean and which, therefore,
accentuate dependence on the foreigner should not
leave the reader with the impression that there are no
industries in which individual control does not predomi-
nate or regions in which the small owner is not holding
his own. Coffee estates in Central America and north-
ern South America are still held to a large extent by
men of only moderate financial resources. Cacao pro-
duction has not passed under centralized control. In
Trinidad and Tobago, especially, it is still typically a
small-holdings industry. Cattle raising, mining, with
some exceptions, and the simple manufacturing indus-
tries characteristic of the region are activities in which
the basis of organization still allows operation with mod-
erate capital. Copra production, from which much is
hoped, is also an industry that may well develop under
the control of small owners.

Taken as a whole, however, industrial organization
depending on local capital is weak and contributes com-
paratively little to foreign trade. The great bulk of the
exports is raw materials, partly manufactured goods
such as sugar; and fruits, produced and marketed by
great commercial organizations drawing their resources
from abroad. The money for developing concessions
to supply transportation services by water and by land
largely comes from foreigners and the services them-
selves are often run by them. Even the Government
monopolies are not infrequently farmed out to Euro-
peans or Americans.

This condition is paralleled by the preponderance of
the products of big business in the import trade. This

BIG BUSINESS AND THE CARIBBEAN 303

is due both to the character of the population and to
the character of the developments in the respective
communities. The people are not of great consuming
capacity. Their average standard of living is low. As
a consequence, the amount of highly manufactured
goods imported, such for example as electrical appa-
ratus, household furniture and fine leather goods, is
much smaller than the size of the population might lead
one to expect. The imports which find their way into
the hands of the common people to an appreciable
amount are chiefly the standard foodstuffs, especially
flour, rice and meats. A marked characteristic of the
import trade is the large percentage of heavy materials
for the developing industries. Iron and steel for con-
struction work on railroads; machinery generally; and
illuminating oil and coal occupy important positions.
These are not goods produced and handled by small
traders. The importance of the products of great cor-
porations is especially characteristic of the imports from
the United States. About three-fourths of our exports
to Central America, for example, are reported as prod-
ucts of "big business."

Caribbean development is one, which, on account of
these conditions, presents problems far different from
those that confronted our pioneers when they went out
to wrest a living from the West. This is true in the
industries ordinarily suited by their character to indi-
vidual as well as corporate exploitation. Even the de-
velopments in agriculture are of a sort unfamiliar to
fanners of temperate zones. The climate is more try-
ing and the pioneer cannot rely on his own labor. In

304 CARIBBEAN INTERESTS

addition, the settler must have considerable capital.
There is no future for the man who has only a few hun-
dred dollars and his hands. He must be able to invest
several thousand dollars at least; must be able to wait
for several years before he can look forward to a re-
turn, unless he buys a running enterprise. He cannot
count on making his enterprise almost self-supporting
as the pioneers did in the United States. His experi-
ment would be one which would not yield a diversity of
products almost sufficient to sustain his family. It may
do this for the native, but it will not for the white set-
tler who is accustomed to the standard of life of the
temperate zone.

Even if the handicaps of climate, labor supply, unfa-
miliar methods of production and lack of capital should
be overcome, the new man in the Caribbean might find
his enterprise wrecked by difficulties of transportation,
plant diseases, and in far too many cases by civil dis-
turbances. There are great opportunities here for those
who, with intimate knowledge of local conditions — cli-
matic, racial and governmental — can invest large capi-
tal, wait for several years for returns, and stand the
strain of heavy temporary losses. But the opportunity
for the small man too often proves a gambler's chance.

The American tropics have great possibilities of de-
velopment in the twentieth century, but not a develop-
ment that will parallel that of the temperate portions
of North America during the past hundred years. The
United States has had the development of "big busi-
ness," but there it has perfected its organization in the
manufacturing industry. In the Caribbean manufac-

BIG BUSINESS AND THE CARIBBEAN 305

ture is almost negligible. Big business has already en-
tered largely into the field of agriculture and forms al-
most as characteristic a feature of the life of the com-
munities of the Caribbean as it does in the manufactur-
ing industry in the United States. Big business now
employs large numbers of skilled laborers in the north-
ern regions, but not so to the southward. The work
there demands only unskilled "hands," for the tasks are
simple. The industrial development of the United
States is one which characteristically employs white
labor. The contrary is the case in the Caribbean.
Whatever development may take place in the planta-
tions cultivating coffee, cacao, bananas, coconuts and
sugar cane, it seems almost certain that the common
laborers will be men of darker skins. Porto Rico and
Cuba, Costa Rica and Salvador, in many ways the most
promising and advanced of Caribbean communities,
have the largest percentage of white blood. Elsewhere
in the Caribbean the population is predominately
"black" in the islands; and "red" on the mainland.

Taken altogether, these elements make a situation
likely to raise difficult questions for a democratic coun-
try like the United States, assuming an increasing de-
gree of control over the Caribbean communities. A
colored population with a low standard of life ; govern-
ments, as a rule, of unstable character except where
steadied by control from Europe or North America,
and large organizations of capital playing an impor-
tant, if not the dominant part in the national economic
development — these are factors which may raise prob-
lems difficult for any government to solve, and especially

306 CARIBBEAN INTERESTS

difficult for a republic with the traditions of the United
States. This last problem — the control of corporate
wealth — may here assume a relative importance much
greater than it has yet reached in temperate regions.
It is essentially a domestic question but one with which
Caribbean governments are ill fitted to deal. The
greatest problem of these regions may come to be, not
the conquest of their diseases, nor the development of
their natural resources, nor even their control for the
advantage of American powers, or of the world; but,
more important than these, the assurance of justice in
the relations between a colored population of few wants,
low education and high birth rate, and large organiza-
tions of capital invested from abroad unaffected by local
public sentiment, and relying for protection upon inter-
ference by the foreign office of the home Government,
rather than upon the local public opinion and courts.
That such problems are already of not infrequent or
trifling importance recent history abundantly proves.
That they will become more important as big business
and foreign capital enter generally into the exploita-
tion of the Caribbean field, is hardly open to doubt.
What degree of supervision by stronger powers may
be found necessary to protect both parties, and how
such control shall be reconciled with the democratic
ideals of self-government, are questions of no small con-
sequence among those which will confront the statesmen
of the stronger American republics, especially the
statesmen of the United States.

CHAPTER XIX

HARBORS AND NAVAL BASES

The announcement in 1913 of the intention of Great
Britain to increase her naval equipment in the waters
of the western Atlantic marks one of the important
steps in the readjustment of international forces which
is to come with the opening of the Panama Canal. To
those who follow the development of the English naval
policy, the move was not unexpected. Indeed, if British
history had not already given many illustrations of the
advisability of action similar to that declared for, the
conditions confronting the empire with the opening of
the Panama Canal could hardly have failed of them-
selves to force the decision.

Great Britain is not alone in the making of plans
to fit the new order of things which will be established
by the great trade route. Every important commercial
and military nation must already have considered the
possibilities which the Canal holds for the welfare of its
nationals. For most foreign nations the commercial
readjustments are far more important than the mili-
tary. The questions which the new traffic will raise
for them will concern tariff policies toward the coun-
tries with whom they will be brought into closer rela-
tions and whose trade will increase. They will seek

favorable pilotage, lighterage and coaling arrangements

307

308 CARIBBEAN INTERESTS

in the ports of call which will come into use, but, ex-
cept for these conventional adjustments, the effect of
the Canal on them will be commercial rather than po-
litical or military.

Those nations which have colonies in the region af-
fected by the Canal, especially those which have colonies
in the Caribbean, will have more important policies to
decide. They must (1) readjust their national arrange-
ments so as to contribute to the internal development
of their colonies and (2) so as to make them profit by
the transit of commerce past their shores. Where pos-
sible, commerce is to be attracted by making the harbors
advantageous ports of call, coaling facilities are needed,
provisions must be supplied and means for transship-
ment of goods to vessels plying to South American
ports or to the islands of the West Indies must be fur-
nished. Finally (3), the bearing of the opening of the
Canal on the military and naval policy of the nation
must be considered. These factors affect the nations
with West Indian colonies in varying degrees.

To judge by colonial sentiment, practically every
harbor from Port-of-Spain, in Trinidad, to Nassau, in
the Bahamas, is to benefit markedly by the increase of
its local trade and by its availability as a port of call.
The home authorities are less enthusiastic. Their
memories are longer. The annals of the people of the
Caribbean in the past eighty years are not happy ones
and the colonial offices are not so sanguine as the colo-
nists. Still in each case the home country has taken
steps to see that whatever advantages the colony may
reap shall not be lost.

HARBORS AND NAVAL BASES 309

The colonial powers interested in the Caribbean in-
clude, besides the United States, two important com-
mercial and military nations — France and England —
and two who make no pretensions to prowess in arms —
The Netherlands and Denmark. As the Panama Canal
neared completion, all four nations made investigations
to determine to what extent the harbors of their colo-
nies needed improvement to assure the proper develop-
ment of their resources and to facilitate their use as
ports of call. All are anxious to find in the opening
of the Panama Canal an event which will banish the
hard times which have been the chronic lot of the Carib-
bean and bring back the prosperity of the early days of
the "muscovado" sugar industry.

The Dutch Antilles have long been a burden on the
home Government. To prepare for better times to
come, The Netherlands Government in the spring of
1911 appointed a commission to investigate what im-
provements should be made to the harbor. An appro-
priation of $48,800 was made for dredging the inlet to
the harbor of Schattegat near Willemstad, which, in-
side the bar, had 33 feet of water — a depth equal to
that of the harbors of Rotterdam and Quebec.1

By the close of 1912 a Dutch company was already
at work removing the obstructions to the harbor and a
private company was building a dock 600 feet long
with a depth of 30 feet alongside. The colony is so
clearly off of the route of the trade to the Far East
and the west coast of South America that the improve-

1 Daily Consular and Trade Reports, May 28, 1912. Article on
Construction Work Abroad. (See table at foot of page 310.)

810

CARIBBEAN INTERESTS

merits will be of use almost exclusively for the transit
trade to Venezuela and for the development of the
meager resources of the island itself.

The French West Indies are in as bad a plight as the
Dutch. The home country is tired of paying deficits
and the revival of sugar plantations is making it less
necessary. The subvention for the two sank from
1,458,000 francs in 1898 to 785,000 in 1908. But still
their condition is not promising.

In March, 1912, a commission from France visited
the islands to select one of their harbors for extensive

Depths Reported by the Commission Appointed to Determine Depth for
Proposed Harbor at Rotterdam

Depth of Waterways

Depth of Harbors

Harbor

High Water

Low Water

Existing

In Construction

33
34
41

28
28
26

33
30
30

30

33

37

Depth of Fairway

25
29
26
27
35
35

High Water

Low Water

London:

London docks

West India docks ....

Royal Victoria

Royal Albert

Liverpool

37
41
51
51
45
54

16
20
30
30
32
37

25
31

28
30
40

Maximum Depth of Harbors

Harbors Building

Low Water

High Water

Low Water

High Water

New York

35
30
35
33

26

40

45

48

40
35

30

46

HARBORS AND NAVAL BASES 311

improvements. Its report was made in February, 1913,
in the Journal Officicl. It was a disappointment to the
colonists. An appropriation to improve the harbors for
local trade was recommended, but both islands were de-
clared so far from the ordinary routes of travel that
they would benefit but slightly from the increase in
traffic due to the Panama Canal. Other islands, the com-
mission held, were more favorably located for use as coal-
ing and supply stations. The French possessions must
count on the development of their own resources rather
than the direct advantages of the new trade. The mer-
chants of Guadeloupe are not discouraged by the refusal
of the home Government to take their ambitions se-
riously. They expect "a decided increase in the number
of vessels" * from the opening of the Canal. Ships in
the Panama trade are to be free from navigation and
pilotage dues, and merchandise landed in transit will be
exempt from payment of quay and statistical charges.

Denmark also has hopes for her colonies, St. Thomas,
St. John and St. Croix. Their economic condition is not
a happy one. Twice the kingdom has been near to
selling the islands to the United States. Once a hurri-
cane swept over them and turned public opinion in this
country against the purchase. Once it was stopped by
opposition in Denmark. Now the Danes think they
can make the islands valuable as a port of call. St.
Thomas has two great advantages — its central position
to the east of Porto Rico, and its excellent harbor, which
is easy to navigate even in rough weather.

In January, 1912, it was announced that plans were

1 Daily Consular and Trade Reports, Mar. 21, 1913.

312 CARIBBEAN INTERESTS

being perfected to "transform St. Thomas into a West
Indian Singapore." * The East Asia Company, with
Prince Valdemar as honorary President, was to deepen
the harbor to 30 feet and build docks to accommodate
vessels of at least 15,000 tons. In April, the Govern-
ment granted part of the harbor to the company. But
Danish public opinion was conservative. Only $1,250,-
000 of the $5,000,000 necessary to float the company was
subscribed and the project was for the time dropped.
Operations were soon undertaken again and early in
1914 it was reported that money had been spent "in
dredging the harbor until now over the greater por-
tion of it vessels of 30 foot draft may anchor in perfect
safety." 2 The natural advantages of the harbor facili-
ties of St. Thomas are not to be overlooked as is in-
dicated by the various attempts of the United States to
purchase the island. In addition, one of the shortest
routes between the Canal and the British ports passes
it.

English colonies also saw the advantages of being
ready as ports of call for the new trade. In November,
1912, a strong agitation was reported in favor of deep-
ening the harbor of Nassau to take ships drawing from
20 to 25 feet of water. Now almost all foreign trade
is in vessels which cannot cross the bar but unload on
lighters. In January, 1913, the support of the project
was brought before the legislative authorities by the

1 Daily Consular and Trade Reports, Jan. 11 and Feb. 23, 1912.
See also Diplomatic and Consular Reports, British, 1912-13. (Cd.
6005-18.)

2 Daily Consular and Trade Reports, March 11, 1914.

HARBORS AND NAVAL BASES 313

Governor. In the same month a commission appointed
by the Government of Trinidad and Tobago recom-
mended improvements in Port-of-Spain. They asked
that 3,000 feet of quays be provided and the channel
of the harbor be dredged to a depth of 27 feet leading to
a basin of similar depth 700 yards wide.1

In Jamaica, the important strategical position of
which was so often pointed out b}^ Admiral Mahan, the
colonial government has purchased a site abutting on
Kingston Harbor in order that there may be facilities
for coaling, docking and repairing ships plying the
Panama route. A Canadian company is to undertake
the improvements. The deepening of the harbor of St.
Georges, Grenada, is under consideration and pro-
posals have been made for the establishment of oil bunk-
ering stations in Barbados and St. Lucia.2

In using their possessions in the Caribbean for mili-
tary, as contrasted to commercial purposes, fewer na-
tions are interested. The Netherlands and Denmark
do not essay an important role in military affairs.
France has no harbor in the West Indies which could
well be made a naval base, and her American posses-
sions are not important. Her close relations with Great
Britain in the Triple Entente and her friendly attitude
toward the United States make remote for her the pos-
sibilities of conflict in America. Further, her military
problems elsewhere are engrossing. Evidently, from

1 See Daily Consular and Trade Reports, Jan. 27, 1913, and
Parliamentary Debates, Great Britain, Jan. 21, 1913, c. 221.

2 See answer of Mr. Harcourt to an oral question in the House
of Commons. Pari. Deb., Great Britain, Jan. 21, 1913, c. 221.

314 CARIBBEAN INTERESTS

the report of the commission which recently investi-
gated the French Antilles and the Pacific establish-
ments, there is no present intention on the part of the
Republic to increase her military and naval forces in
the Caribbean.

The only remaining European naval power with colo-
nies in the Caribbean is England. Her position is in
strong contrast to that of France, Denmark and Hol-
land. She has extensive possessions in the West Indies.
She is the greatest carrying nation in the world and
the best route for many of her colonial markets lies
through the Panama Canal. Evidently, her naval pol-
icy in the Caribbean is not one to be determined by
local conditions alone, nor one to be settled on the
grounds on which the decisions of the other European
nations are based.

British naval policy in the Caribbean has of late years
been largely determined by conditions and policies of
recent origin. These have not counseled the maintain-
ing of important forces in any American waters.

The Royal Navy formerly maintained a well equipped
station at Halifax in Nova Scotia and there was once
a plan to establish an important naval base at Esqui-
malt, British Columbia, overlooking the Strait of Juan
de Fuca. Both these establishments are now little more
than recruiting stations. A similar change in plans af-
fected the forces in the West Indies. The Earl of
Selborne, speaking in the House of Commons on March
22, 1904, summarized the reasons for the altered policy
thus: "The whole naval strategic situation has under-
gone a complete revolution . . . that revolution is the

HARBORS AND NAVAL BASES 315

birth of the American Navy." 1 The changes in naval
warfare and the shifting of sea power among the various
nations have also influenced the distribution of the naval
forces. Formerly, it was the policy to distribute the
fleet in various parts of the world where its divisions
could be made easily effective within the different areas
in which they were stationed. Under this plan St. Lucia
was made a great naval base. From it the British
squadrons could command the West Indies and keep
watch over the French naval station in those seas, not
more than eighty miles distant. New conditions have
made these plans inapplicable. France no longer main-
tains an important naval division in West Indian waters.
Her political rivalry with England does not now domi-
nate her politics and the character of modern com-
munication and naval equipment makes it possible to
send aid quickfy from a centralized fleet to any quarter
where it is needed.

The Right Honorable A. J. Balfour, the Prime Min-
ister, declared in the Committee of Supply on May 11,
1904, "we have gone upon the broad line that, as the
British fleet and as the British army should be available
for the defense of the British Empire in all parts of
the world our force should be, as far as possible, concen-
trated at the center of the Empire, from which it could
be distributed as each necessity arose to that part of the
Empire which stood most in need of it." 2 The growth
of the German fleet and the new problems of defense
which it created contributed additional reasons in sup-

1 Quoted in Aspinall, A. E., The British West Indies, 1912,
p. 396. 2 Ibid., p. 397.

316 CARIBBEAN INTERESTS

port of this policy. In conformity with this plan, the
white garrisons were ordered withdrawn from St. Lucia,
Barbados and Jamaica in 1905.1 Port Royal, Jamaica,
was no longer maintained as a naval base. Both that
port and the coaling depot at St. Lucia were "reduced
to cadres on which the expenditure in time of peace is
small but which in time of war can be at once de-
veloped according to necessity." 2

The colonists received the new arrangement with no
enthusiasm. The hurricane in Jamaica, which necessi-
tated accepting aid from the American Navy, and the
riots in St. Lucia, which the local police were unable to
handle, were cited as evidences that the policy of the
home Government in "deserting" the colonies was a
mistake. They urged that the race question also would
become acute as soon as the white ensign ceased to be a
familiar sight in West Indian harbors.3 The party of
the opposition in the House of Commons added its pro-
test to the criticism of the new policy.4 But the British
force in the region has not been increased.5

1 The Jamaica troops were not withdrawn. See Pari. Deb.,
Mar. 22, 1911, c. 495, reply of Mr. Acland.

2 Aspinall, A. E., op. cit., p. 396. Quoting Right Hon. Alfred
Littleton, Secretary of State for the Colonies in 1905. See also
Pari. Deb., Mar. 22, 1911, c. 495, for discussion of removal of
forces from St. Lucia and Barbados.

3 For discussion of this subject, see Mr. Bryce in Pari. Deb.,
May 17, 1905, c. 709-710.

4 See Sir Gilbert Parker, Pari. Deb., July 15, 1907, c. 1337-8;
Mr. Newman, Pari. Deb., Mar. 22, 1911, c. 495, et seq.; Mr.
Haddock, Pari. Deb., Feb. 22, 1912, c. 876; Mr. Sherley Benn,
Pari. Deb., Mar. 20, 1912, c. 1933.

5 Pari. Deb., May 3, 1911, c. 413.

HARBORS AND NAVAL BASES 317

However, late discussions in Parliament show that
this standard is not likely to remain satisfactory to the
British public in view of the conditions created by the
opening of the Panama Canal. On March 20, 1912,
Mr. Sherley Benn, speaking in the House of Commons,
called the attention of the Admiralty to the fact that
formerly it was planned to build the Panama Canal by
private capital "and neither Great Britain nor America
were to erect any fortifications along the canal. Un-
fortunately, private enterprise failed, and it was found
necessary that the American government should com-
plete the Panama Canal, and naturally and justly Amer-
ica must protect it." He pointed out that ships from
New York and Canada to New Zealand and Australia,
and from Canada to the East would go through the
Canal. "As a natural result, we must expect that the
trade from America and from Canada to the countries
lying in the east must increase very largely and as
long as we are one of the great carrying countries of
the world, we must expect that our ships will trade from
Canadian and American ports to the east using the
Panama Canal. . . . Not only shall we have to defend
our ships, but we shall have to defend our colonies ly-
ing between Bermuda and British Guiana. Those
ships . . . will be very liable to attack b}^ European
countries if we should be at war with them, and Amer-
ica happens to be a neutral country." 1 These state-
ments indicate both the importance of the naval ques-
tions of the West Indies to Great Britain and the fact
that the increase of British forces in the region cannot

1 Pari. Deb., Mar. 20, 1912, c. 1933.

318 CARIBBEAN INTERESTS

be regarded as inconsistent with the interests of the
United States.

Though the actual naval representation of the Em-
pire is likely to remain relatively small in times of peace
so long as the policy of concentrating the forces in
home waters is followed, the British Government will
not fail to see the importance of assuring itself a naval
base in America commensurate with the maritime inter-
ests the Navy will be called upon to protect. The war-
ships in the West Indies may remain few, but the neces-
sity of being prepared to accommodate large naval
forces will not be overlooked.

The location of the necessary naval base has for sev-
eral years been a matter of consideration by the Ad-
miralty. Heretofore, the ports of Jamaica and Trini-
dad have been spoken of with favor.1 Compared to
these, Bermuda has an obvious advantage of position.
It is now the base from which both the British vessels
detailed for sendee in the northeast fisheries and those
engaged in West Indian duties operate. It could be
made a center from which to guard both Caribbean and
Canadian interests.

How little a naval establishment in Bermuda is to
be considered inconsistent with American interests in
the West Indies is evident from a survey of the ports
which can be used as bases by the American worships.
Among these would, of course, be counted the Gulf
ports in the continental territory of the United States ;
but even leaving these out of consideration, the position

1 See speech by the Right Hon. A. J. Balfour in Committee of
Supply, May 11, 1904, quoted by A. E. Aspinall, op. cit., p. 398.

HARBORS AND NAVAL BASES 319

of the United States in the Caribbean is one of such
advantage both on account of the number of bases and
the character of their harbors that no other country is
likely to be in a position to dispute American control.
A glance at the map shows a long arc of islands
stretching from Key West and Nassau to Port-of-
Spain. All the chief ports capable of being used as
naval bases, with the exception of those held by the
larger European powers, are now either in the control
of the United States or have been the subject of active
negotiations looking toward their acquisition. Key
West is already in our possession. Our arrangements
with Cuba once gave us control of two ports, one to-
ward the western, one near the eastern end of the island,
to be used for naval purposes. Since our treaty with
Cuba provides that she shall alienate «no territory to a
"foreign" Government the value of a base at the west-
ern end is slight, for Key West commands the center
of the Straits of Florida and places us in almost as
strong a position as we would occupy if possessed of an
additional base there. Arrangements have been made
by which the holdings at this point have been given up
and larger areas have been acquired at Guantanamo —
the base at the eastern end of the island. Construction
work is practically completed. The base is equipped
with fuel oil tanks and wharf, naval magazine, a radio
station and other facilities to make it an effective naval
station.1 It gives the United States an unequaled posi-
tion for the control of the Windward Passage separat-

1 See Annual Report of the Navy Department, 1913, Washing-
ton, 1914, pp. 46, 121, 122, and Ibid., 1914, pp. 128, 133-134.

320 CARIBBEAN INTERESTS

ing Cuba from the Dominican Republic. East of the
latter island lies Porto Rico, from which the United
States can control the Mona Passage.

Various proposals made by recent Administrations
will, if carried through, make our position even more
secure. Between Cuba and Porto Rico lies the trou-
bled island of San Domingo with its two republics, each
of which contains a harbor reputed to be of great de-
sirability as a naval base. Mole St. Nicholas, in Haiti,
the port which disputes with the harbor of St. Thomas
the title of "the Gibraltar of the West Indies" overlooks
the Windward Passage from the east, holding thus the
opposite side of the strait commanded by Guantanamo.
President Benjamin Harrison, under the influence of
Secretary of State Blaine, once sought to secure con-
trol of the place for the United States.1 The advan-
tage of its possession is obvious. During the negotia-
tions for a fiscal protectorate in September, 1915, Sec-
retary Lansing authorized the statement that we had
not even asked for control of this point. It is under-
stood, however, that the local government then in con-
trol had offered its possession and it is hardly to be
supposed that the United States has no desire for the
control of so commanding a position.

Toward the eastern end of the island in the Domin-
ican Republic lies Samana Bay, also at one time the
subject of active negotiations by our Government in
President Grant's Administration.2 It would enable

1 Douglass, Frederick, Haiti and the United States, North Amer-
ican Review, Vol. 153, pp. 337-4-5 and 450-59 (1891).

2 See Richardson, J. D., Messages and Papers of the Presi-

HARBORS AND NAVAL BASES 321

its possessor to command the Mona Passage from the
west. Since 1905, we stand in the relation of protector
to the Dominican Republic. Still farther east off the
coast of Porto Rico in the Leeward Islands lies the har-
bor of St. Thomas, belonging to Denmark, twice already-
near to annexation by the United States. The recently
concluded treaty with Nicaragua contains clauses giving
us naval rights farther to the south and west in Great
Corn and Little Corn Islands off the east coast, near
Blueflelds and Pearl Lagoon. A naval base on the Gulf
of Fonseca is also included which, though the port lies on
the Pacific, strengthens our position in the easily accessi-
ble Caribbean. Finally, of course, there are the great
fortifications erected at the Panama Canal itself around
which all other naval projects of the United States in
the Caribbean center. Key West, Guantanamo, Porto
Rico and Colon already furnish bases of operation not
to be matched by any other power in this region, bases
whose total strength it seems not unlikely may be in-
creased by adding to the list some at least among Mole
St. Nicholas, Samana Bay, St. Thomas and the posi-
tions of advantage in Central America.

In view of our present and prospective position in
West Indian waters, there seems little cause for alarm
in the establishment of a naval base in Bermuda, a
thousand miles north of Ponce and Guantanamo and
about six hundred miles east of Cape Hatteras.

The adjustments in naval forces induced by the Pan-

dents, Vol. VII, pp. 96 et seq. and 128 et seq., and documents
cited by Foster, J. W., A Century of American Diplomacy, Bos-
ton, 1900, p. 419.

322 CARIBBEAN INTERESTS

ama Canal seem unlikely greatly to affect other than
the Anglo-Saxon nations. Even those made by Great
Britain are only incidental to the possession of far scat-
tered colonies. For the United States alone is the
opening of the Panama Canal an event of prime im-
portance in the development of her naval policy in the
American Mediterranean.

The effects of the new waterway on the economic and
commercial interests of the Caribbean peoples are
broader. For some it will mean prosperity because of
the trade that comes to ports of call, for all it will bring
an increased touch with the world's markets which may
turn the colonies, so long dependent upon "subventions"
and "grants-in-aid" from the home treasury, again into
the position of self-supporting communities. The
eighteenth century gave the West Indies an unex-
ampled prosperity, the nineteenth brought them eco-
nomic distress and revolution, perhaps the twentieth,
through development of their resources and touch with
world markets, may bring them the economic basis for
a solid well-being.

CHAPTER XX

CONCESSIONS AND THE MONROE DOCTRINE

Any wide view of American foreign policy cannot
fail to take account of a fundamental modification of
our attitude toward investments in the undeveloped
countries of the New World. Until the past few
years, the nationals of any country might make ar-
rangements touching any subject they wished with the
countries of Latin America. No diplomatic objection
would be raised by the United States and the home
country could be called upon to protect the incipient or
vested rights of its subjects. If foreign money lend-
ers sold bonds bearing usurious rates of interest, if
through corrupt means they secured oppressive conces-
sions, it was no concern of the United States. The
Monroe Doctrine was considered purely a political an-
nouncement, one which demanded that the Govern-
ments of Europe should not take control of the terri-
tory of Latin- American republics, but which left the
field of economic development open to free exploitation.

But of late years the attitude of the United States
toward foreign investments in American countries has
changed. The Monroe Doctrine has tended to become
an economic policy as well as a political one. This,
we in America have been either anxious to disguise or
unwilling to recognize. It has been hard for us to real-

323

324 CARIBBEAN INTERESTS

ize that investment of European capital in a country
may involve its economic absorption to such a degree
that the foreign investments and those influences which
stand back of them are, in fact, the country's govern-
ment. The creditors of a weak country, too, may be
so insistent in their demands for payment that they will,
to paraphrase a clause of the Monroe Doctrine, oppress
the country and control its destiny. If back of the
foreign creditor or concessionaire stands a government
ready to insist upon the observance of his rights, the
economic interest may ripen into a political one. De-
layed development, bad management, and bad faith —
any of these may bring a weak state into the power of
a strong one whose citizens have invested heavily in
industries subsidized by the government or public bonds
or private exploitation enterprises.

The end of the Spanish- American War marked the
first big step in the recent development of the economic
side of the Monroe Doctrine. Cuba was to be given
its freedom only under conditions which it was hoped
would insure that it would remain free, conditions to
which the Cubans themselves at first objected. Impor-
tant among these clauses was the one which declared
that Cuba should not contract a debt greater than her
ability to pay, an engagement to that effect being in-
serted in a treaty with the United States. This was a
provision of the famous Piatt Amendment, one object
of which was to make impossible the duplication, in
Cuba, of the bad financial conditions with which every
other independent Caribbean or Central American gov-
ernment is confronted.

CONCESSIONS 325

The farsightedness of this policy soon had a demon-
stration. Certain European powers decided to force
the Government of Venezuela to pay debts alleged to be
due to their nationals, that is, they were about to take
action which might transform economic claims into po-
litical ones.

The outcome of the Venezuelan blockade has already
been discussed. The not altogether happy solution had,
at least, the merit that, due to the stand taken by the
United States Government, the economic claims against
the republic had not been allowed to ripen into political
rights.

From this time two phases of American foreign pol-
icy in relation to what may be called the economic side
of the Monroe Doctrine developed. 1. In line with the
protests made to the Department of State by the Ar-
gentine Minister of Foreign Affairs at the time of the
Venezuelan troubles, the State Department sought the
adoption of a general rule of international law which
would regulate the conditions under which pecuniary
claims might be collected, especially when those claims
had the character of a public debt. The Rio Confer-
ence of 1906 was asked to consider the conditions under
which, if at all, force could be used in the collection of
such claims and the delegations from the American
states championed before the Hague Conference in
1907 the rule to limit the freedom of action in the collec-
tion of public debts. The result was, the resolution
passed with but few dissenting votes in 1907, stipulating
that there shall be no collection of public debts by force
unless the debtor first refuses an offer of arbitration or

326 CARIBBEAN INTERESTS

makes it impossible to arrive at an arbitral award, or
refuses to live up to the decision given by the arbitrator.
2. The second development is, for American states,
even more fundamental. It aims to remove the cause
rather than to prescribe the cure. The Hague agree-
ment does not limit the opportunity for economic ab-
sorption of weaker by stronger countries, neither does it
effectively prohibit the creation of the shady class of
governmental obligations which have been the perennial
curse of the Caribbean. Economic exploitation in the
Caribbean and northern South America means some-
thing entirely different from that for which it stands
in the United States and in southern South America.
All of these regions have had to rely on foreign capital
for the development of their resources, but in the United
States especially the money borrowed was put into en-
terprises managed by natives. The companies which
used the money were not, properly speaking, foreign ex-
ploiting companies, but rather American companies
which borrowed foreign capital. The history of much
of our railroad development illustrates this condition.
The investment, too, was regularly with us non-po-
litical. The rights of the concessionaires might come
from the Government, but the capitalists seldom de-
veloped an important degree of control over the Gov-
ernment. In southern South America, the companies
backed by foreign capital were often foreign in man-
agement, but they operated among people who were
developing ability to create governments of real power,
which would be able to guarantee peace and the pro-
tection of property. The local governments, that is,

CONCESSIONS 327

were not in danger of becoming merely agents of for-
eign bondholders and concessionaires.

Now none of these conditions existed in the Carib-
bean or northern South America. The countries were
undeveloped, the investments had to be made among
people not able to cany out the economic projects in-
volved and unable to command the confidence of for-
eign capitalists. The result was, the concessions in this
region were granted to companies not only foreign in
capital, but in management, and the concessionaire
often took advantage of the weakness of the people
with whom he dealt. Concessions were and are in this
region frequently political as well as economic; in
fact, they are often political rather than economic. In
countries such as these where active capital for public
enterprises is drawn largely from abroad, the foreign
bondholder who absorbs the economic opportunities of
the country exercises also great political control.

To cite the most signal example of this sort of for-
eign absorption is to cite the experience of Mexico,
northwest of the Caribbean region, in which foreign
investment has reached an unprecedented figure. The
estimates compiled for the State Department show that
Americans in that country own $1,057,770,000 of the
$2,434,241,422 total national wealth. English citizens
own $321,302,800, French citizens $143,446,000, while
Mexican citizens own but $793,187,242 and all other
nationalities $118,535,380.1 In other words, of the en-
tire wealth of the licpublic of Mexico less than 30 per
cent, is in the hands of Mexicans.

1 Daily Consular and Trade Reports, July 18, 1912.

328 CARIBBEAN INTERESTS

In this particular instance, the chief foreign capital
interest is American. That it exercises a wide political
influence in the Republic is undeniable. If in some
country of the Caribbean similar economic conditions
should arise, the invested capital being owned by some
foreign country's nationals, the situation could hardly
fail to cause the United States concern.

The possibility of such developments, indeed the pos-
sibility that any large foreign investment in public en-
terprises may become political in character, has led the
United States in recent years to attempt to put itself in
a position where it can control the total amount of the
obligation which the weaker countries can be allowed to
undertake. The concession or loan which has a po-
litical character and which maj^ bring international com-
plications, it has been felt, must be eliminated. This
will be for the benefit of the foreign bondholders in
that the}^ will know that they are not running risks of
such speculative nature as has formerly been the case.
It will be to the benefit of the smaller states in that
they will be protected against their own improvidence.
It will be to the benefit of the United States in that,
the political character of the investments being removed,
the temptation of the European powers to call into
question the Monroe Doctrine will be lessened.

Though this is not the avowed policy of either po-
litical party and probably the leaders of both would
■disclaim any intention to make the Monroe Doctrine
other than a political one, the actual practice of both
the Republican and Democratic Administrations shows
that the State Department, no matter under whose

CONCESSIONS 329

control, does not on this point follow a wavering policy.
The attempt to protect the Cuban people against it-
self in the contracting of unwise debts has already been
mentioned, but the beginning made there only pointed
the way to a number of other agreements of a similar,
but even more comprehensive, sort.

The Republican Administration of President Roose-
velt saw the institution of a protectorate over the new
Republic of Panama, and the Dominican Republic, with
engagements concerning their finances. The Republi-
can Administration of President Taft followed prac-
tically the same policy as was shown especially in the
proposed treaties with Nicaragua and Honduras, which
would have created conditions very similar to those in
the Dominican Republic.

The policy of the Wilson Administration on this point
is essentially the same. We now have new treaties with
Nicaragua and Haiti, which involve us in the finances
of these countries. The maintenance of a force of Amer-
ican marines at Managua, under the Wilson Adminis-
tration, illustrates in another way the protection of
economic interests in order that political questions may
not arise.

President Wilson, in his famous speech at Mobile,
summarized the policy we are following. He declared :

"You hear of 'concessions' to foreign capitalists in
Latin America. You do not hear of concessions to
foreign capitalists in the United States. . . . They are
invited to make investments. ... It is an invitation,
not a privilege; and States that are obliged, because
their territory does not lie within the main field of mod-

830 CARIBBEAN INTERESTS

ern enterprise and action, to grant concessions are in
this condition, that foreign interests are apt to domi-
nate their domestic affairs: a condition of affairs al-
ways dangerous and apt to become intolerable. What
these States are going to see, therefore, is an emancipa-
tion from the subordination, which has been inevitable,
to foreign enterprise. . . . They have had harder bar-
gains driven with them in the matter of loans than any
other peoples in the world. ... I rejoice in nothing so
much as in the prospect that they will now be emanci-
pated from these conditions, and we ought to be the
first to take part in assisting in that emancipation. . . .

"I want to take this occasion to say that the United
States will never again seek one additional foot of ter-
ritory by conquest. . . . She must regard it as one of
the duties of friendship to see that from no quarter
are material interests made superior to human liberty
and national opportunity. I say this, not with a single
thought that anyone will gainsay it, but merely to fix
in our consciousness what our real relationship with the
rest of America is."

The fact of the matter is that the diplomacy of the
Caribbean and northern South America has always been
very largely a diplomacy of claims. To call it "dollar
diplomacy" gives it a bad ring, but does not change its
character, and to consider that men with money to lend
will do it without prospect of a return proportionate to
the risk is presuming something contrary to human na-
ture. The important point in the mind of the capi-
talist is to know that he will get a return of principal
and interest. The important point for the Caribbean

CONCESSIONS 331

country to which he lends is to be assured that the capi-
talist will not demand more. If the United States can,
by interposing its good offices and supervision, increase
the safety of the investment which the banker makes
and at the same time protect the weaker country from
exploitation it will in the long run confer a favor on
both the other parties. It will widen the field for profit-
able conservative investment of capital, American and
foreign, it will open up the money market to the Latin-
American states so that industries and resources which
now lie undeveloped will be exploited. Diplomacy in
Central America, the Caribbean and northern South
America will be largely a matter of dollars whether we
wish it or not and the only question for us is whether
we will so shape our policy that concessions will be
economic rather than political. Concessions will be
economic only to the extent that the countries granting
them are able to insure, of their own volition or by their
own volition plus the good will of some other power,
that public order will be maintained, property protected
and public debts limited to the probable ability to pay.

The feeling in the United States against non- Amer-
ican investments, which rn^ty come to have a political
character, is not one which is confined to the Executive
Department. It is evidenced both in the action of our
Congressional bodies and in the attitude of public opin-
ion. This is well illustrated by what has come to be
known as the Magdalena Bay incident.

An American company had secured from Mexico a
tract of several million acres surrounding Magdalena
Bay in Lower California. The land was almost value-

332 CARIBBEAN INTERESTS

less except for limited possibilities for lumbering. The
bay and adjacent waters contained moss producing a
certain dye and the fishing rights were supposed to be
valuable. The company failed and its creditors tried,
in 1911, to sell out its rights to certain Japanese. Be-
fore the bargain was completed the approval of the
State Department at Washington was sought. Though
it was shown that there was no evidence whatsoever
that either the Mexican or Japanese Government was
directly or indirectly connected with the proposed pur-
chase, the opinion of the State Department, announced
by Mr. Knox, was averse to the sale on the ground "that
such a transfer would be quite certain to be interpreted
in a manner to cause a great outcry." * Another
proposition by which Japanese would hold 35 per cent,
of the stock with an option on an additional 15 per
cent., the rest of the stock and the management to be
American, met with no more favorable reception.2

The position of the Administration was further sup-
ported by the Senate in July by the introduction and
later passage, by a large majority, of the now famous
Lodge Resolution, which read :

"Resolved: That when any harbor or other place in
the American continent is so situated that the occupa-
tion thereof for naval or military purposes might
threaten the communications or safety of the United
States, the Government of the United States could not

1 P. C. Knox to F. H. Allen, Aug. 17, 1911, Senate Doc. 694,
62nd Cong., 2nd Sess., Senate Documents, Vol 38.

2 P. C. Knox to W. H. Taft, April 27, 1912, Senate Doc. 640,
62nd Cong., 2nd Sess., Senate Documents, Vol. 38.

CONCESSIONS 333

see without grave concern the possession of such har-
bor or other place by any corporation or association
which has such a relation to another government as to
give that government practical power of control for
national purposes." *

Of course, as applied to the Magdalena Bay case, the
resolution was apparently beside the point, for there
was no information tending to prove that any such re-
lation as was spoken of existed or was intended be-
tween the Japanese Government and those who sought
to buy the concession. But the resolution was impor-
tant as a declaration of opinion by the Senate. It shows
a growing feeling that the economic exploitation of
American countries may have a close connection with
their political interests.

What the formal relation of any concessionaire may
be to its home Government is not so important as its
de facto relation. If the attitude shown in the Magda-
lena Bay incident is an expression of American policy,
then we must in fact view with serious concern any at-
tempt by the nationals of a power not American to
control directly or indirectly, at least, any harbor or
economic resource closely connected with military and
naval supremacy in this continent.

In President Wilson's Administration there occurred
another illustration of the prejudice against conces-
sions of an economic-political character. This time the
question was raised on the other side of the continent.
It involved the projects for extension of the holdings
of S. Pearson & Son, Limited, already discussed. This

1 Quoted in Amer. Jour, of Int. Law, Vol. VI, p. 938.

334 CARIBBEAN INTERESTS

company had extensive interests in Mexico. The ex-
tension of its holdings in another country, Colombia, in
view of the fact that modern navies are coming to be
oil-burning, not coal-burning, and in view of the prox-
imity of the Panama Canal, could not but be con-
sidered by the United States as an unfortunate, if not
an unfriendly, act. There was an unmistakable pro-
test in American public opinion against the extension
of such economic-political concessions to a company
closely connected with the British Government. The
possibility of having along the Caribbean coast a num-
ber of such de facto naval bases in the practical posses-
sion of rival maritime powers was decidedly unpleasant.
We may still protest that the German criticism that
the Monroe Doctrine is an economic doctrine is unfair.
It is unfair because it is not an instrument of conscious
aggression against Latin America as has so often been
charged. It is not a policy advocated by us in order
that we may create for ourselves an exclusive trade em-
pire or guarantee expansion of our political control.
But there is a way in which the Monroe Doctrine is an
economic doctrine. It is a doctrine which must take
into account the economic factors which may come to
influence a country's development. We cannot look
upon any economic development in European hands in
Latin America which would have political results af-
fecting unfavorably the independence of the American
Republics except as a development unfriendly to us.
It matters not whether this development is one which,
by absorbing the economic resources of the country,
would make its possession by foreigners in all but name

CONCESSIONS 335

a fact, or whether the exploitation affects but a single
commodity of political importance. It is all one. To
obtain an economic concession which by its political re-
sults, to paraphrase the original Monroe Doctrine
again, would operate against American countries so as
to "oppress them and control their destinies," is an act
unfriendly to the United States.

CHAPTER XXI

INTERNATIONAL LEADERSHIP IN THE CARIBBEAN

The political developments in American international
affairs in recent years have brought a great increase in
the importance of the Caribbean to the United States.
From the purchase of Louisiana to the end of the nine-
teenth century the Caribbean, like all other portions of
the world, played only an unimportant part among our
national interests. We had a long-drawn-out disagree-
ment with Great Britain as to the proper commercial
policy in the West Indies; the early struggles of the
Spanish colonies to gain their independence drew our
sympathy; and during the Civil War the operations of
the Navy took our attention southward, but taken as a
whole, except for a gradually increasing commercial con-
nection, we held toward Caribbean affairs the position
of onlookers without that feeling of concern born of
solidarity of interest.

The developments following the Spanish- American
War have brought a revolution in our national posi-
tion. The rapid expansion of foreign trade has made
us aware that we are no longer untouched by the
changes in international relations. Step by step the po-
litical interests left us by the treaty of peace have
broadened to include a larger number of the Latin
communities. The Piatt Amendment, followed by the

reciprocity treaty, expanded our responsibilities and

336

INTERNATIONAL LEADERSHIP 337

rights in Cuba, the Venezuelan debt-collecting incidents
indicated another new phase of American foreign pol-
icy, the Panama revolution and the resulting activity in
building the canal brought strained relations with one
of the republics on the mainland, made us the protector
of another and greatly broadened our commercial out-
look and military responsibilities. The fiscal protector-
ate over the Dominican Republic gave us another sort of
responsibility toward a weak neighboring republic. Still
later the negotiations of the Taft and Wilson Adminis-
trations with Central American republic and Haiti have
shown that our Government, irrespective of party, has
no disposition to abandon the policy of assuming added
political responsibilities in the international affairs of
our southern neighbors. This succession of events,
peaceful but far reaching in influence, has greatly
changed our outlook on American affairs. The nega-
tive or passive policy which we formerly followed, one
which involved intervention only after a wrong was
done, is giving way to a positive policy preventive rather
than remedial. We are assuming responsibilities of
complex character intended to stabilize the conditions
of Caribbean life, to foster the development of local re-
sources and industries, to promote foreign trade, and
to avoid the possibility of incidents which might induce
interference by non- American powers.

The logic of events forces us into a place of increas-
ing importance. The more intensive exploitation of
natural resources characteristic of the commercial de-
velopment of the world, brings with it the demand of
foreign investors for protection of their property, a

338

CARIBBEAN INTERESTS

condition which will necessitate an increasing supervi-
sion of unstable governments in order to insure that
the Monroe Doctrine be not questioned. Our posses-
sion of the Panama Canal also will draw with it greater
responsibility because it will bring the trade of the
world, passing through the waterway, into closer touch
with Caribbean affairs.

Partly as cause of these developments, partly as their
result, our trade interests in the Caribbean have ex-
panded and will continue to expand. Our markets are
the natural outlet for Caribbean products; we already
take much more from that region than does the rest
of the world, and lying close to our shores, it is a natural
field for the expansion of our export trade. It is a
natural field in which we will seek raw materials. The
degree to which already the trade of the United States
dominates this region is shown in the following table:

Commercial Exchanges of the United States and Caribbean Countries *

(Compiled from Statistical Abstract of the United States, 191^,

Washington, 1915, p. 688)

Country

Year

Total Imports

Imports
from the

U.S.

Per

Cent,
from
the

U.S.

Total Exports

Exports
to the

U.S.

Per

Cent,
to
the

U.S.

1913
1913
1913
1913
1912
1913
1913
1914
1913
1912
1913
1914
1911

8,685.000

10,062,000

5,133,000

5,768,000

9,872,000

6,167,000

26,987,000

133,975,000

10.935,000

4,576,000

9,272,000

17,005,000

67,535,000

4,468,000
5,053,000
3,464,000
3,244,000
5,413,000
2,490,000
7,630,000

71,380,000
6,499,000
1,826,000
5,769,000
6,158,000

20,317,000

51.4

50.2
67.5
56.2
54.8
40.4
28.3
53.3
59.4
39.9
62.2
36.2
35.2

10,322,000

14,450,000

3,300,000

7,712,000

2,065,000

7,666,000

34,316,000

170,776,000

17,273,000

3,636,000

10,470,000

26,324,000

51,604,000

5,241,000

3,923,000

2,869,000

2,722,000

1,780,000

1,310,000

18,862,000

136,930,000

842,000

1,646,000

5,601,000

10,540,000

19,868,000

50.8

27.1

86.9

35.3

86.2

17.1

55.0

80.2

4.9

Dutch Colonies

The Dominican Republic

45.3
53.5
40.0

British West Indies 2. . .

38.1

Total

300,041,000

143,711,000

359,914,000

212,140,000

1 This table does not include the colonies of France and Denmark.

8 Compiled from Statistical Tables Relating to British Self-Governing Dominions, Crown Colonies,
Possessions and Protectorates, Part XXXVI, 1911 [Cd. 7024], 1913.

INTERNATIONAL LEADERSHIP 339

The new conditions, commercial and political, which
now confront us bring a new phase of the Monroe Doc-
trine and a new phase of imperialism. We act for the
betterment of Caribbean conditions in order that Euro-
pean powers may not feel called upon to act, and we thus
prevent interference in American affairs by rendering
it unnecessary. At the same time, the supervision which
we undertake has as its object the helping of the weaker
peoples to help themselves. In contrast to annexation,
destroying the local sovereignty, our policy has been
to assume the minimum of control necessary to assure
public order and the observance of sound financial policy,
leaving the people to manage their own governments
and acquire by experience the ability to rule themselves.

This policy has led us to assume certain obligations
by treaty arrangements, and others rest on no formal
written documents but are being carried out by coopera-
tion of the Executive Department of our Government
and the authorities of the governments affected. In
still other cases no supervision of a definite character is
established as yet. The actual incidents which may call
for action by the United States may arise, therefore,
under a variety of conditions. We may intervene under
formal treaty provisions, as was the case in the second
intervention in Cuba ; the naval and military forces may
be used for upholding the Government against a revo-
lution as in Nicaragua in 1912, or the Executive may
exercise pressure by sending officers to "observe the
elections" as in a recent election in the Dominican Re-
public. We may, at the request of both parties, super-
vise the elections, as has occurred in Panama, or the

340 CARIBBEAN INTERESTS

Executive may merely acknowledge its cognizance of
the existence of certain arrangements by private parties,
as in the later developments in Nicaragua. Of course,
where none of these means is used it is still possible for
the Government to act, after the wrong has been done,
to prevent any action violative of the Monroe Doctrine.

Where reliance must be on remedial action after the
event delicate situations may arise. The property inter-
ests affected may touch subjects of European countries
as well as our own citizens and the state in which the
wrong is said to have occurred may resent any inter-
vention by the United States. Situations of this sort
put us in an unwelcome position. If we take the ground
that all states are equal in international law and that
we must respect the local sovereignty, we have no right
to intervene. We must then rely upon our ability to
lay down the limitations which wre believe should be
observed in the punitive measures inflicted by the Euro-
pean government. If, on the other hand, we intervene
to right the wrong ourselves, we offend the local gov-
ernment. To refuse to take measures of redress and
deny the right to do so to others would be an indefen-
sible position.

The disposition to act under an assumed police power
which has seemed to be evidenced by the United States
in handling Caribbean affairs has not passed without
criticism, especially in Latin America. It has been
assumed by some that our Government aims at arbi-
trary dictation of American foreign policy in general,
involving ultimate annexation of at least a number of
our neighbors and the brusque disregard of the feelings

INTERNATIONAL LEADERSHIP 341

of the rest. To others our action has meant only the
assumption of that control taken by any great power
situated among a group of lesser ones.

To prove that in population and material wealth the
United States is not only the first, but the dominant
power in America, is not difficult. The radical argu-
ment in favor of extension of our authority on these
grounds may be thus summarized:

1. The United States alone represents a majority of
the people of America. To allow a minority to control
policy, even if that minority included all the other peo-
ples of the New World, would not be to take the con-
sensus of American opinion as to what should be Amer-
ican policy. This would, of course, be true in a much
greater degree if the policy opposed to that advocated
by this country were supported only by a small state
or small group of states. The populations of the chief
units in America are reported as follows :

Population of Principal American Countries x
(Population in 1913 or latest available date)

Country

Population

Country-

Population

8,700,000

2,268,000

24,308,000

7,758,000

411,000

2,119,000

589,000

690,000

387,000

1,210,000

3,464,000

5,473,000

Cuba

2,474,000

Ecuador

1,500,000

Haiti

2,500,000

Canada

Mexico

15,000,000

Central America:

Paraguay

The Dominican Republic
United States . .

800,000
725,000

Guatemala

100,102,000

(including Hawaii, Por-
to Rico and Alaska)
Uruguay ....

Panama

1,226,000

2,756,000

Chile

Total

163,460,000

1 Compiled from Statistical Abstract of the United States, 191k, Washington, 1915.
This table does not include the European colonies of the Caribbean region.

342 CARIBBEAN INTERESTS

Our Government thus represents America in that its
population comprises the majority of the people of
America. Of course, if a classification were possible
which could show the relative position of the different
units, taking into consideration the average education,
standard of life, industrial development and similar ele-
ments, the preponderance of the United States would
appear in a manner much more decided.

2. The United States should speak for America, it
is further asserted, because its population represents the
majority of people of the white race in the New World.
The white race everywhere, it is argued, has shown the
greatest aptitude for political development. South
America is still predominantly of aboriginal and mixed
stock. Reliable statistics are unobtainable. Peru, Ecua-
dor and Bolivia are variously estimated as from fifty
to seventy per cent. Indian. The first two are cited as
having six per cent, white population by F. Garcia Cal-
deron in his work on Latin America: Its Rise and
Progress. Mestizos form the bulk of the population in
Colombia, Chile, Uruguay and Paraguay. They form
about ninety per cent, of the population of Venezuela
and about fifty per cent, of the population of the entire
continent. The total population of Latin America is
estimated by different authorities at from 60,000,000 to
79,863,336, with a white population of from 10,000,000
to "over 12,000,000." 1

About four out of every five white persons in the
New World, therefore, live in the United States. To

1 For these estimates, see Bigelow, John, American Policy, New
York, 1914, P- 6) et seq., with authorities there cited.

INTERNATIONAL LEADERSHIP 343

give to Latin Americans, who, with the exception of
the inhabitants of the southernmost group of states, are
of unstable political habits, equal voice with the United
States with a population in 1910 of 91,972,266 white
persons or 08.9 per cent, of the total population of the
country, would be to place the destinies of the continent
in the hands of the irresponsible and inexperienced.
Under such circumstances the United States must exer-
cise a dominant interest in American politics.

3. In a commercial way also the preponderance of

Foreign Trade of American Countries Compared 1

Country

Argentina

Bolivia

Brazil

Central America

Chile...

Cclombia

Cuba

Ecuador

Haiti

Mexico

Dutch colonies

Paraguay

Peru

The Dominican Republic.

Uruguay

Venezuela

British West Indies 2

Total.
Canada. . .

Total America (except United
States)

United States (including Alaska,
Hawaii, and Porto Rico)

Year

1913
1913
1913
1913
1913
1913
1914
1912
1913
1913
1912
1913
1913
1913
1913
1914
1911

1914

1914

Imports

$406,805,000

21,358,000

326,865,000

45,687,000

120,274,000

26,987,000

133,975,000

10,653,000

10,935,000

93,020,000

4,576,000

8,120,000

29,631,000

9,272,000

50,666,000

17,005,000

57,535,000

$1,373,364,000
633,692,000

$2,007,056,000

1,893,926,000

Exports

$466,582,000
36,551,000

315,586,000
45,515,000

144,653,000
34,316,000

170,776,000
13,718,000
17,273,000

129,971,000
3,636,000
5,631,000
44,469,000
10,470,000
65,142,000
26,324,000
51,604,000

$1,582,217,000
431,590,000

$2,013,807,000

2,329,684,000

1 Compiled from the Statistical Abstract of the United States, 191k, Washington,
1915, p. 688.

2 Compiled from Statistical Tables Relating to British Self-Governing Dominions,
Crown Colonies, Possessions and Protectorates, Part XXXVI., 1911 [Cd. 7024], 1916.

344 CARIBBEAN INTERESTS

the United States is striking. No comparison can be
made of the amount of internal commerce in the various
countries. The export and import trade can be com-
pared. Though the countries other than the United
States have the advantage in this comparison in that
they represent non-manufacturing areas and, therefore,
are dependent to a greater degree than we are upon
foreign products, still the total foreign trade of the
United States far outranks that of the other units.

In other words, the total foreign commerce of Latin
America and the British and Dutch West Indies was
$2,955,581,000, that of the United States $4,223,-
610,000. Even if the commerce of Canada be grouped
with that of the Latin American countries it is evident
that the interest of the United States in New- World
foreign commerce is one of commanding importance.

Other bases of comparison would yield similar results.
None of such figures, all but extremists would agree,
proves the existence of an abstract right for the domi-
nant group to speak for the whole, but the}?- do show
the contrast of human interests represented, the con-
trasts in political experience and ability, the contrast
in the size of the stakes which the different regions have
in international commerce. These are influences which,
though not recognized in the rules of international law,
always have, de facto, an important effect in the con-
duct of international affairs. It is not to be expected
that the United States, as the chief party involved, will
not see to it that the policies adopted are such as meet
her approval.

Among those opposed to the assertion of independent

INTERNATIONAL LEADERSHIP 345

leadership by the United States in the international
affairs of the New World are those who, in recent years,
have advocated a modification of the Monroe Doctrine
which would bring to its active support other states of
America. So long as it is a national doctrine, it is
argued, the other states must look upon it as a policy
which denies them a voice in settling American affairs.1
The "colossus of the north" may interpret the doctrine
as it pleases and violate the rights of other states at
will. The arguments of superiority of population and
commercial strength carried to their logical end would
result in absurdity, for they would mean that the coun-
try thus endowed had at least a moral, if not a legal,
right to take any measures it desires against "weaker"
or less advanced states. Such a dominance of Ameri-
can affairs by any one country would be intolerable.
Cooperation between the units involved, on the other
hand, brings no such disadvantages. Should at least all
the stable states of America unite to settle the disputes
which arise, their decision would have greater prestige,
and the ill feeling which might still exist when the
stronger group acted as the de facto representative of
all America would not, as at present, run parallel to race
lines.2

A plan for general cooperation of the stronger inde-
pendent states of America for the settlement of Ameri-

1 A criticism of this point of view is contained in Taft, W. H.,
The United States and Peace, New York, 1914, pp. 1-40.

2 See for an elaboration of some phases of this argument,
Sinister, W. M., Acquisitive Statesmanship, Annals of the Ameri-
can Academy of Political and Social Science, 55, pp. 215-252
(1915).

346 CARIBBEAN INTERESTS

can affairs is not without its appeal. In the minds of
its advocates the adoption of the proposal would bring
a broader American basis for the Monroe Doctrine. It
would be an extension of the big-brother policy, the
policy of the strong protecting the weak. When the
situations which are apt to arise are analyzed in detail
the plan is not so attractive. There are doubtless large
general policies in which such working together is pos-
sible and an advantage to all concerned. In many dis-
putes between American powers and in amicable ad-
justment of some internal affairs in the states, common
action by the disinterested neighbor states may accom-
plish beneficent results. But, in cases involving a con-
crete clash of interests in which diplomacy fails to bring
an adjustment and recourse must be had to the use of
force, a general council is less apt to succeed. The case
would demand not merely a general offer of good offices
and diplomatic exchange of views, but a definite
assumption of responsibilities by the powers. In such
cases it would be difficult to find a basis of cooperation.
Questions such as these would arise :

1. What states shall be taken into the group which is
to guide American policy? The plan for cooperation
which has been generally suggested includes the United
States and three South American powers, Argentina,
Brazil and Chile. But the pretensions of such an alli-
ance or entente would be unlikely to receive the assent
of the other Latin nations. Uruguay, Costa Rica and
Salvador, at least, might feel slighted at being grouped
with the powers not asked to participate. Even the
less stable governments could hardly be expected to wel-

INTERNATIONAL LEADERSHIP 347

come a grouping which implied their inferiority. It
does not remove the de facto recognition of the inequal-
ity of states to create by a formal act a group of four
states, who are to be considered the primary powers to
take the place of one which informally stands in a posi-
tion of leadership. The Latin- American states not in-
cluded would resent interference by "superior" Latin-
American states quite as much as by the United States
alone.

2. Assuming that the four powers mentioned were
disposed to exercise an international police power in
American affairs, what would be the basis of organiza-
tion ? Would there be an attempt to give each an equal
voice in the negotiations? That would hardly be possi-
ble. In an alliance between Great Britain and Portu-
gal, it is inconceivable that the former would give the
latter equal influence in determining their joint foreign
policy. Yet the inequality among the members of the
proposed alliance would not be less marked. Strong
though the stabler South American states are coming
to be, it is nevertheless to be remembered that Argen-
tina has a population only slightly larger than Pennsyl-
vania and that Massachusetts has more people than
Chile. Brazil has a population of 24,308,000, but her
effective force is, at most, not greater than that of
Argentina.

On the other hand, a formal recognition by the South
American countries of unequal power in the policing
agreement is not to be expected. Any thoroughgoing
acceptance of that principle would leave them in the
position of satellites and make the influence of the

348 CARIBBEAN INTERESTS

United States still controlling in all cases. The basis
of organization would be unstable, and likely to cause
misunderstandings whether it attempted to give equal
or unequal powers to the parties.

3. Would there be equality of interest among the
parties to the entente in the specific problems which
would be presented to them for solution? The cases in
which there would be an affirmative answer are few.
The South American members would not feel that the
United States had an interest equal to theirs in a dis-
pute, for example, between Chile and Peru, or one in
which foreign property interests within their borders
were involved. The question might involve their 'Vital
interests," while for us it might be of but little moment.
They might feel that they should be allowed to settle
the matter for themselves, or on the best terms they
could secure from the states immediately concerned.
Anything which tended to obscure their right to do so
might hinder the possibility of a permanent satisfactory
settlement rather than promote it. Similarly, in a ques-
tion lying close to our own borders, the United States,
the stabilizing influence in North America, might find
in a question arising in the West Indies or in Central
America, a problem affecting its vital interests. Any-
thing which hampered its decision would only delay a
solution and tend to turn affairs from their natural
course. The Caribbean lies close to our doors, it is
primarily our problem, not theirs. The questions which
arise there are United States problems more than Amer-
ican problems. No nation or group of nations has inter-
ests there comparable to those of our Government.

INTERNATIONAL LEADERSHIP. 349

We are not to forget, of course, that there are in-
stances of settlements brought about by friendly inter-
vention of the United States for the settling of South
American disputes and somewhat less marked accom-
plishments through South American mediation in
North American international affairs — notably in the
relations between the United States and Mexico — but
these are examples of the sort of thing which may be
accomplished when the interest is of minor character or
where at least one of the parties is anxious to avoid
unpleasant complications. Real clashes of interest
which necessitate for their settlement either the use of
force or the threat to use it would not be so apt to com-
mand the hearty cooperation of the "allied" powers.

Is it not better for both the strong South American
states and for us frankly to admit that there are certain
international affairs which lie so close to the develop-
ment of each division that participation of distant pow-
ers in their settlement would be unacceptable? Then
for the consideration of larger interests truly American,
conferences might be held as occasion demanded, while
each group kept a free hand in matters which concerned
it primarily.

4. Is not the grouping together of all American prob-
lems after all a formal rather than a real classification?
Why should the United States feel itself concerned in
such disputes as the Tacna-Arica controversy and how
is Chile directly affected by the disputes for control
between the leaders of Mexico or Haiti?

There are, in fact, in America two groups of inter-
ests, not one. The stable South American states have

350 CARIBBEAN INTERESTS

their primary interests and we have ours. They should
keep their freedom of action in the problems that lie
nearest them, profiting on occasion by our good offices
and friendship. We should hold a similar position as
to the affairs which touch us directly. Harmony is not
created by artificial bonds which would often run counter
to geographical, economic and political interests.

Our interventions under the Monroe Doctrine for the
protection of our interests in international affairs have
been typically Caribbean incidents. Those are our inter-
ests. To induce the southern South American states
to work with us in this field would be to secure their
cooperation in matters in which they are only distantly
concerned and ones in which we might find our desires
diametrically opposed to their preferences. We have as
little real interest in certain of their international prob-
lems as they have in most of ours. In many cases, in
fact, we in the United States are farther from the inter-
national problems of South America than we are from
the politics of Europe or even Asia. Buenos Aires is
twice as far from New Orleans as Liverpool is from
New York. San Francisco is six hundred miles nearer
Yokohama than it is to Valparaiso. Again, some of the
stabler South American states are as strongly con-
trasted with certain other Latin- American states as we
are. Haiti and Argentina are both "Latin countries";
that is almost the only characteristic they have in com-
mon. The relations of such countries are of little real
concern to either. We are non-Latin, but international
affairs which touch Haiti or Mexico or Central America
will often bear some relation to our own foreign policy,

INTERNATIONAL LEADERSHIP 351

far as we are from sharing with them a common racial
or lingual inheritance.

In America, as in all the world, strong nations will
lead the weak. The better governed of South Ameri-
can states will play the active part in her foreign affairs.
The same thing is true in the northern portion of the
New World. The United States there will inevitably
hold a position of primacy. We must see to it in our
neighborhood as they must in theirs that the policies
we adopt deserve the approbation of right-thinking men,
but we should be wise enough to keep liberty of action
in the sphere naturally our own. They should be equally
free. In our Caribbean policy we should act in a man-
ner deserving the approval of the stronger South Amer-
ican states, but we cannot allow our policy to be deter-
mined by them. The vital interests of the United
States are intimately interwoven with the problems of
the Caribbean — theirs are not. We cannot yield to any-
one the shaping of our policy in that region, for no one
has a stake there comparable to ours.

A SELECT LIST OF RECENT DISCUSSIONS RELATING
TO THE CARIBBEAN

The Caribbean in General
Books

Adams, F. U., Conquest of the Tropics, New York, 1914.
; Babson, Roger W., The Future of South America, Boston,

1915.
Blakeslee, G. H., (Ed.), Latin America, New York, 1914.
Bonsai,, Stephen, The American Mediterranean, New York,

1912.
Calderon, F. G., Latin America, New York, 1913.
Crichfield, G. W., American Supremacy, 2 vols., New York,

1908.
Hart, A. B., The Monroe Doctrine, An Interpretation, Boston,

1916.
Speeches Incident to the Visit of Philander Chase Knox

... to the Countries of the Caribbean. Washington,

1913.

Periodicals, Pamphlets and Documents

Casper, J. L., Railway Building in the Tropics, Gunton's

Mag., 24, pp. 555-564, (1903).
Jones, Chester Lloyd, The Banana Trade, Independent, 75,

pp. 77-80 (1913); Bananas and Diplomacy, No. Amer.

Rev., 198, pp. 188-194 (1913) ; Oil on the Caribbean and

Elsewhere, No. Amer. Rev., 202, pp. 536-544 (1915).
Lyle, E. P., Control of the Caribbean, World's Work, 10,

pp. 6664-6669 (1915).
Sears, A. F., German Influence in Latin America, Pop. Sc.

M., 72, pp. 140-152 (1908).
Showalter, W. J., The Countries of the Caribbean, Natl.

Geog. Mag., 24, pp. 227-249 (1913).
353

354 CARIBBEAN INTERESTS

Wilson, R. A., Changing Conditions in the Caribbean, World
Today, 16, pp. 184-190 (1909).

A Caribbean Policy for the United States, Amer. Jour.

of Int. Law, 8, pp. 886-889 (1914).

Daily Consular and Trade Reports, United States, Wash-
ington.

Commerce Reports, United States, Washington.

Diplomatic and Consular Reports, British, London.

Bulletin of the Pan-American Union, Washington.

Central America
Books

Corlett, W. T., The American Tropics, Cleveland, 1908.
Domville-Fife, C. W., Guatemala and the States of Central

America, London, 1913.
Palmer, Frederick, Central America and Its Problems, New

York, 1910.
Putnam, G. P., The Southland of North America, New York,
1913.

Periodicals

Anderson, Luis, The Peace Conference of Central Amer-
ica, Amer. Jour, of Int. Law, 2, pp. 144-152 (1908).
Barrett, J., Central America's Step Forward, Independent,

64, pp. 179-182 (1908).
Brown, P. M., American Intervention in Central America,

Jour, of Race Development, 4, pp. 409-427 (1913-1914);

American Diplomacy in Central America, Proc. Amer. Pol.

Sci. Assoc, 8, pp. 152-163 (1912).
Emerson, Edwin, Unrest in Central America, Independent,

67, pp. 1286-1291 (1909).
Filsinger, E. B., Immigration, a Central-American Problem,

Ann. Amer. Acad, of Pol. and Soc. Sc, 37, pp. 743-750

(19H).
Frothingham, L. A., Central America, New Eng. Mag., n. s.,

41, pp. 265-271 (1909).
Germanicus (Pseud.), The Central American Question from
a European Point of View, Amer. Jour, of Int. Law, 8,
pp. 213-224 (1914).

RECENT CARIBBEAN DISCUSSIONS 355

Hale, W. B., With the Knox Mission to Central America,
World's Work, 24, pp. 179-193 (1912); Our Danger in
Central America, World's Work, 24, pp. 443-451 (1912).

Hyde, H. M., Dollar Diplomacy, Everybody's, 25, pp. 756-
765 (1911).

MacClintock, S., Revolutions and Interventions in Central
America, World Today, 21, pp. 955-962 (1911).

Marchand, H., Les Etats-Unis et l'Amerique Centrale, Q.
Dip., 29, pp. 106-113 (1910).

Scott, J. B., The Central American Peace Conference of
1907, Amer. Jour, of Int. Law, 2, pp. 121-144 (1908).

The First Case Before the Central American Court of

Justice, Amer. Jour, of Int. Law, 2, pp. 835-842 (1908).

The First Decision of the Central American Court of

Justice, Amer. Jour, of Int. Law, 3, pp. 434-446 (1909).

The Venezuelan Situation, Amer. Jour, of Int. Law, 3,

pp. 436-446 (1909).

Central America in General and Nicaragua in Particular,

Outlook, 106, pp. 18-23 (1914).

Colombia

Books

Eder, J. P., Colombia, New York, 1913.
Petre, F. L., Simon Bolivar, New York, 1910.
Thompson, N., Colombia and the United States, London,
1914.

Periodicals, Pamphlets and Documents

DuBois, J. T., Colombia's Claims and Rights (pam.), n.p.
n.d. (1914).

Harding, Earl, In Justice to the United States — A Settle-
ment with Colombia, Jour, of Race Development, 4, pp.
427-443 (1913-1914).

Maxey, Edwin, The Pending Treaty with Cohmbia, Rev. of
Revs., 53, pp. 191-195 (1916).

Report on Trade Conditions in Colombia (pam.), De-
partment of Commerce and Labor, Bureau of Manu-
factures, Washington (1907).

356 CARIBBEAN INTERESTS

Peudhomme, H., Projet d'un Canal Interoceanique Entre
l'Atlantique et le Pacifique, le Canal de l'Atrato, R. Gen
de dr. int. public, 18, pp. 449-456 (19H).

Roosevelt, Theodore, The Monroe Doctrine and the Panama
Canal, Outlook, 105, pp. 745-754 (1913).

Taylor, Hannis, Why the Pending Treaty with Colombia
Should Be Ratified (pam.), Washington, 1914.

Commerce of Colombia, Bulletin of the Pan-American

Union, Dec, 1912.

Our Remarkable Treaty with Colombia, Rev. of Revs.,

49, pp. 682-686 (1914).

The Panama Canal and Our Relations with Colombia,

Sen. Doc, 471, 63d Cong., 2d Sess.

Relations Between United States and Republic of Colom-
bia, 62d Cong., 3d Sess., House Documents, Vol. 135, Doc.
1444.

Costa Rica
Books

Guardia, R. F., History of the Discovery and Conquest of

Costa Rica, New York, 1913.

Periodicals and Pamphlets

Costa Rica, General Descriptive Data Prepared in September,

1914, Pan-American Union, Washington, 1914.
Ruhl, Arthur, Campaigning in Costa Rica, Outlook, 106,
pp. 35-40 (1914).

Cuba
Books

Lindsay, Forbes, Cuba and Her People of Today, Boston,

1901.
Porter, R. P., Industrial Cuba, New York, 1899-
Reno, George, Cuba, Havana, 1915.
Robinson, A. G., Cuba and the Intervention, New York, 1905.

Cuba, Old and New, New York, 1915.
Verrill, A. H., Cuba, Past and Present, New York, 1914.
Wright, I. A., Cuba, New York, 1910.

RECENT CARIBBEAN DISCUSSIONS 357

Periodicals, Pamphlets and Documents

Atkins, E. F., Cuba's Imminent Bankruptcy, No. Amer. Rev.,

173, pp. 768-773 (1901).
Austin, H. A., Cuba's Future, No. Amer. Rev., 189, pp. 857-

863 (1909).
Beveridge, A. J., Cuba and Congress, No. Amer. Rev., 172,

pp. 535-550 (1901).
Brooks, Sydney, An English View of Cuba, Forum, 46, pp.

461-470 (1911).
Conant, C. A., Our Duty in Cuba, No. Amer. Rev., 185, pp.

141-146 (1907).
Foster, J. W., The Annexation of Cuba, Independent, 6l, pp.

965-968 (1906).
Johnston, Sir Harry, An Englishman's Impressions of

American Rule in Cuba, McClure's, 33, pp. 496-504

(1909).
Platt, A. H., Our Relation to the People of Cuba and Porto

Rico, Ann. Amer. Acad, of Polit. and Soc. Sc, 18, pp.

145-159 (1901).
Pritchett, H. S., Some Recollections of President McKin-

ley and Cuban Intervention, No. Amer. Rev., 189, pp.

397-403 (1909).
Quincy, J., Political Aspect of Cuba's Economic Distress,

No. Amer. Rev., 174, pp. 12-19 (1902).
Robinson, A. G., The Work of the Cuban Convention, Forum,

31, pp. 401-412 (1901); Cuban Constitution Making,

Independent, 53, pp. 435-438 (1901).
Welliver, J. C, Annexation of Cuba by the Sugar Trust,

Hampton's Mag., 24, pp. 375-388 (1910).
Wood, L., The Military Government of Cuba, Ann. Amer.

Acad, of Pol. & Soc. Sc, 21, pp. 153-182 (1903); The

Cuban Constitutional Convention, Independent, 52, pp.

2605-2606 (1900).

Sugar at a Glance, T. G. Palmer, 62d Cong., 2d Sess.,

Senate Documents, Vol. 33, Doc. 890.

Cuba, General Descriptive Data Prepared in September,

1914, Washington, 1914.

358 CARIBBEAN INTERESTS

Wood, L., The Origin and Purpose of the Piatt Amend-
ment, Amer. Jour, of Int. Law, 8, pp. 585-591 (1914).

The Dominican Republic
Boohs

Stoddard, T. L., The French Revolution in San Domingo,
Boston, 1914.

Periodicals, Pamphlets and Documents

Albrecht, H., and Henry, F. A., Development of the Do-
minican Republic, Department of Commerce, Special Con-
sular Reports, No. 65, Washington, 1914.

Hancock, H. J., Situation in Santo Domingo, Ann. Amer.
Acad, of Pol. and Soc. Sc, 26, pp. 47-52 (1905).

Harshberger, J. W., Queen of the Antilles, Educa., 23, pp.
277-283 (1903).

Hollander, J. H., The Convention of 1907 between the
United States and the Dominican Republic, Amer. Jour.
Int. Law, 1, pp. 287-296 (1907). Financial Difficulties
of San Domingo, Ann. Amer. Acad, of Pol. and Soc. Sc,
30, p. 93-103 (1907). The Readjustment of San Do-
mingo's Finances, Quar. Jour, of Economics, 21, p. 405-
426 (1907). The Regeneration of San Domingo, Inde-
pendent, 75, pp. 489-493 (1913). The Dominican Con-
vention and Its Lessons, Jour, of Race Development, 4,
p. 398-408 (1914).

Krausz, S., Situation in Santo Domingo, Outlook, 78, pp. 189-
192 (1904).

Maxey, E., The Future of Santo Domingo, Arena, 31, pp.
476-480 (1904).

Stoddard, T. L., Santo Domingo: Our Unruly Ward, Rev. of
Revs., 49, pp. 726-731 (1914).

Salomon, C. S., Santo Domingo, a Turbulent Republic, Rev.
of Revs., 29, pp. 323-326 (1904).

Thorp, William, Our Problem in Santo Domingo, World's
Work, 8, pp. 4815-4817 (1904).

Review of the Transactions of the Customs Receivership

of Santo Domingo During the Second Year of Its Opera-

RECENT CARIBBEAN DISCUSSIONS 359

tion, April 1, 1906-March 31, 1907, with Collateral Ex-
hibits and Remarks, n.p.n.d.
Thorp, William, Final Report of the Transactions of the
Dominican Customs Receivership under the Modus
Vivendi, Covering the Twenty-Eight Months, April 1,
1905, to July 31, 1907, n.p.n.d.

Dominican Republic (pam.), Pan-American Union,

Washington, 1915.

— — Dominican Trade Statistics. Imports and Exports,
1908-9, submitted by the General Receiver of Dominican
Customs, Santo Domingo, March 4, 1910.

Summary of Commerce, Dominican Republic, 1910, sub-
mitted ... by the General Receiver of Dominican Cus-
toms, Santo Domingo, March, 1911.

Summary of Commerce of the Dominican Republic for

the Calendar Year 1911, prepared in the Office of the
General Receiver of Dominican Customs, Bureau of In-
sular Affairs, Washington, March, 1912.

Annual Reports of the Dominican Customs Receivership,

1908 to date, issued by Bureau of Insular Affairs, War De-
partment, Washington, 1908-11, and from the office of
the General Receiver of Dominican Customs, Santo Do-
mingo, Dominican Republic, 1912 to date.

Summary of Commerce, Dominican Republic for 1912

submitted ... by the General Receiver of Dominican
Customs, Santo Domingo, March, 1913.

Guatemala
Books

Winter, N. O., Guatemala and Her People of Today, Boston,

1909-
Domville-Fife, C. W., Guatemala and the States of Central
America, London, 1913.

Periodicals

Cabrera, D. E., President Cabrera and His Career, Overland

M. n.s. 53, pp. 259-267 (1909).
Hays, M. A., Guatemala's Transcontinental Route, Rev. of

Revs. 38, pp. 200-204 (1908).

360 CARIBBEAN INTERESTS

Tisdel, E. F., Guatemala, the Country of the Future, Nat.
Geog. Mag. 21, pp. 596-624 (1910). Guatemalan Rail-
road Construction, Bui. Pan-American Union, 32, pp.
270-276 (1911).

Winter, N. O., Guatemala, the Land of Opportunities, World
Today, 12, pp. 51-56 (1907).

White, Stanley, Guatemala; Its Present Condition and Fu-
ture Possibilities, Misc. Rev. 35, pp. 807-822 (1912).

Haiti
Books

Prichard, Hesketh, Where Black Rules White, New York,
1900.

Periodicals, Pamphlets and Documents

Austin, H., Making a President, Impressions of the Latest
Revolution in Haiti, New Eng. Mag. n.s. 45, pp. 271-281
(19H).

Hale, W. B., Disorder in Haiti, Independent, 54, pp. 1180-
1183 (1902).

Livingstone, W. P., A Caribbean Derelict, No. Amer. Rev.
195, pp. 261-265 (1912).

MacCorkle, W. A., The Monroe Doctrine and Its Applica-
tion to Haiti, Ann. Amer. Acad, of Pol. and Soc. Sc, 54,
pp. 28-56 (1914).

Marvin, George, Helping Haiti, World's Work, 30, pp. 524—
529 (1915); Assassination and Intervention in Haiti,
World's Work, 31, pp. 404-410 (1915).

Miller, F. T., Centennial of the Negro Republic, World's
Work, 7, pp. 4239-4242 (1903). Haiti, the Prey of
Modern Finance, Independent, 57, pp. 557-560 (1904).

Myatt, G., Stalking the President of Haiti, Outlook, 107, pp.
971-977 (1914).

Honduras

Periodicals and Pamphlets

MacClintock, Samuel, Refunding the Foreign Debt of Hon-
duras, Jour. Pol. Econ., 19, pp. 216-228 (1911).

RECENT CARIBBEAN DISCUSSIONS 361

Perry, E. W., Transportation Development and Projects in
Honduras, Eng. Mag., 42, pp. 902-915 (1912).

Winter, N. O., Honduras, A Land of the Future, World To-
day, 18, pp. 515-524 (1910).

Honduras, General Descriptive Data. Pan-American

Union, Washington, 1915.

The Proposed Loan Conventions between the United

States and Honduras and the United States and
Nicaragua, Amer. Jour, of Int. Law, 5, pp. 1044—1051
(1911).

Nicaragua

Periodicals, Pamphlets and Documents

Bromley, R., Nicaragua Canal and the Clayton-Bulwer Treaty,

19 Cent., 49, pp. 100-115 (1901).
Brown, P. M., American Intervention in Central America, in

Latin America, (G. H. Blakeslee, ed. Clark University

Addresses, 1913), pp. 245-262.
Conant, C. A., Our Mission in Nicaragua, No. Amer. Rev.,

Vol. 196, pp. 63-71 (1912).
Dawley, T. R., Nicaragua: the Country and the People, Out-
look, 70, pp. 1015-1019 (1902).
Espinosa, R., Memorial to the United States Senate on Nica-

raguan Affairs, pam., San Jose, Costa Rica (1912).
Hahn, L. R., What the War in Nicaragua Means to the United

States, Cosmopolitan, 49, pp. 48-50 (1910).
Ham, C. D., Americanizing Nicaragua, Rev. of Revs., 53, pp.

185-191 (1916).
Hershey, A. S., The Situation in Nicaragua, Independent, 68,

pp. 72-75 (1910).
Palmer, Frederic, Zelaya and Nicaragua, Outlook, 93, pp.

855-859 (1909).
Uzame, Octave, Nicaragua or Panama Canal, Fortnightly, 81,

pp. 670-683 (1904).

Nicaraguan Affairs. Hearing before the Committee on

Foreign Relations, U. S. Senate, 62nd Cong., pursuant to
S. Res. 385 to investigate as to the Alleged Invasion of

362 CARIBBEAN INTERESTS

Nicaragua by Armed Sailors and Marines of the United

States. Senate Doc. 62nd Cong., 2d Sess., 1911—12.
Uzame, Octave, The Proposed Loan Conventions between the

United States and Honduras and the United States and

Nicaragua, Amer. Jour, of Int. Law, 5, pp. 1044—1051

(1911).
The Revolution in Nicaragua, Rev. of Revs., 46, pp.

571-576 (1912).

■ Commerce of Nicaragua, Bulletin of the Pan-American

Union, January, 1913.
— ' — Nicaragua. General Descriptive Data, Pan-American

Union, Washington, 1915.
— — Nicaragua, Political and Currency Reform, Economist,

77, pp. 1234-1235 (1913).

Treaty with Nicaragua, Independent, 76, p. 537 (1913).

New York Bankers and Nicaragua, Independent, 76, p.

198 (1913).

Our Policy in Nicaragua and the Recent Revolutions, No.

Amer. Rev., 197, pp. 50-61 (1913).

_ , Panama and the Panama Canal

Books

Abbot, W. J., Panama and the Canal, New York, 1913.

Edwards, Albert (pseud, for Ballard, Arthur), Panama, the

Country and the People, New York, 1912.
Forbes-Lindsay, C. H., Panama, the Isthmus and the Canal,

Philadelphia, 1906.
Forbes-Lindsay, C. H. (Author given as Lindsay, Forbes),

Panama and the Canal Today, Boston, 1913.
Fraser, J. F., Panama and What It Means, London, 1913.
Freehoff, J. C, (ed.) America and the Canal Title, New

York, 1916.
Oppenheim, L., The Panama Canal Conflict Between Great

Britain and the United States of America, Cambridge,

1913.
Weir, H. C, The Conquest of the Isthmus, New York, 1909-

Periodicals, Pamphlets and Documents

Austin, H. A., The Fortification of the Panama Canal, Forum,
45, pp. 129-141 (1911).

RECENT CARIBBEAN DISCUSSIONS 363

Authier, G. F., Realizing the Dream of Panama, Rev. of Revs.,

43, pp. 49-61 (1911).
Barker, J. Ellis, Panama: The Difficulty and Its Solution,

Nineteenth Century, 72, pp. 745-762 (1912).
Baty, T., Panama Tolls Question, Yale Law Journal, 23, pp.

389-396 (1914).
Bishop, J. B., Our Government's Course in Panama, Internat.,

9, pp. 247-260 (1904). A Benevolent Despotism, Scrib-

ner's Mag., 53, pp. 303-319 (1913).
Chamberlain, L. T., A Chapter of National Dishonor, No.

Amer. Rev., 195, pp. 145-174 (1912).
Chester, C. M., Diplomacy of the Quarter Deck, Amer. Jour.

of Int. Law, 8, pp. 443-476 (1914).
Colquhoun, A. R., The Panama Canal Tolls: A British View.

No. Amer. Rev., 196, pp. 513-522 (1912).
Davis, G. W., Fortification at Panama, Amer. Jour, of Int.

Law, 3, pp. 885-908 (1909).
Escobar, F., President Roosevelt's Message and the Isthmian

Canal, No. Amer. Rev., 178, pp. 122-132 (1904).
Foster, J. W., The Clayton-Bulwer Treaty, Reasons for Its

Abrogation, Independent, 53, pp. 1167-1171 (1901).
Gordy, J. P., The Ethics of the Panama Case, Forum, 36, pp.

115-124 (1904).
Grahame, J. L., The Canal Diplomacy — Justification for

the British Protest, No. Amer. Rev., 197, pp. 31-39

(1913).
Hains, P. C, Neutralization of the Panama Canal, Amer. Jour.

of Int. Law, 3, pp. 354-394 (1909).
Hart, A. B., Have We the Right to Fortify the Panama Canal,

World Today, 20, pp. 287-292 (1911).
Hazeltine, M. W., The Proposed Hay-Pauncefote Treaty, No.

Amer. Rev., 170, pp. 357-366 (1900).
Hill, D. J., Supremacy in the Panama Canal, Rev. of Revs.,

49, pp. 722-725 (1914).
Johnson, E. R., Coastwise Toll Exemption, Trade Discrim-
ination and Possible Evasion of Law, No. Amer. Rev., 199,

pp. 540-547 (1914).
Kennedy, C, The Canal Fortifications and the Treaty, Amer.

364 CARIBBEAN INTERESTS

Jour, of Int. Law, 5, pp. 620-638 (1911). Neutralization
and Equal Terms, Amer. Jour, of Int. Law, 7, pp. 27—50
(1913).

Kennedy, M. J., A Broken Treaty, the Panama Tolls, Fort.
Rev., 101, pp. 905-913 (1914).

Knapp, H. S., The Real Status of the Panama Canal as Re-
gards Neutralization, Amer. Jour, of Int. Law, 4, pp. 314-
358 (1910).

Latane, J. H., Neutralization Features of the Hay-Paunce-
fote Treaty, Amer. Hist. Ass'n, Rept. 1902, 1, pp. 291-
303. The Panama Canal Act and the British Protest,
Amer. Jour, of Int. Law, 7, pp. 17-26 (1913). The
Treaty Relations of the United States and Colombia,
Ann. Amer. Acad, of Pol. & Soc. Sci., 22, pp. 115-126
(1903).

Mahan, A. T., The Panama Canal and the Distribution of the
Fleet, No. Amer. Rev., 200, pp. 406-417 (1914). The
Panama Canal and Sea Power in the Pacific, Century, 60,
n.s., pp. 240-248 (1911). Was Panama "A Chapter of
National Dishonor"? No. Amer. Rev., 196, pp. 549-568
(1912). Fortify the Panama Canal, No. Amer. Rev., 193,
pp. 331-339 (1911).

McLellan, A. G., The Panama Canal versus American Ship-
ping, No. Amer. Rev., 193, pp. 111-120 (1911).

Mondell, F. W., Why Should We Fortify the Panama Canal,
Independent, 73, pp. 17-22 (1912).

O'Gorman, James, The Panama Canal An American Highway,
Independent, 78, p. 278 (1914).

Olnev, Richard, Fortification of the Panama Canal, Amer.
Jour, of Int. Law, 5, pp. 298-302 (1911).

Owen, R. L., Why the Panama Tolls Exemption Should Be
Repealed, Rev. of Revs., 49, pp. 560-563 (1914).

Perez, R., A Colombian View of the Panama Canal Question,
No. Amer. Rev., 177, pp. 63-68 (1903).

Root, E., Panama Canal Tolls, Canadian M., 42, pp. 494-510
(1913-14).

Seabury, Samuel, The Panama Canal, Outlook, 103, pp. 537-
545 (1913).

RECENT CARIBBEAN DISCUSSIONS 365

Scott, G. W., Was the Recognition of Panama A Breach of

International Morality? Outlook, 75, pp. 947-950 (1903).
Smith, G. D., The Panama Canal, 111. Law Rev., 7, pp. 98-

118 (1912).
Stimson, H. L., Defence of the Panama Canal, Scribner's

Mag., 54, pp. 1-6 (1913). Fortifying the Canal, Sci.

Amer., 107, p. 385 (1912).
Wambaugh, E., The Right to Fortify the Panama Canal, Amer.

Jour, of Int. Law, 5, pp. 615-619 (1911). Exemption

from Panama Tolls, Amer. Jour, of Int. Law, 7, pp.

233-244 (1913).
White, H. F., Legal Aspects of the Panama Canal, Illinois

Law Rev., 8, pp. 442-461 (1914).
Whiteley, J. G., The Monroe Doctrine and the Hay-Paunce-

fote Treaty, Forum, 30, pp. 722-727 (1901).

Canal Treaties, Senate Doc. 456, 63rd Cong., 2d Sess.,

1911-12.

Panama Canal Traffic and Tolls, E. R. Johnson, 62nd

Cong., 2d Sess., 1911-12, Senate Documents, Vol. 37, Doc.
575.

The Panama Canal, Hearings before the Committee on

Interstate and Foreign Commerce, 62nd Cong., 2d Sess.
(1911-12), House Documents, Vol. 137, Doc. 680.

Panama Canal, Hearings before the Committee on Inter-
oceanic Canals, U. S. Senate, 62nd Cong., 2d Sess., 1911-
12. Senate Documents, Vol. 35, Doc. 191 (1912).

Panama, General Descriptive Data, Pan-American Union,

Washington, 1916.

Relations between the United States and the Republic of

Colombia, 62nd Cong., 3d Sess., 1912-13, House Docu-
ments, Vol. 135, Doc. 1444.

« Panama Canal Tolls, Article prepared by the Law Officer

of the Isthmian Canal Commission, Mr. Feuille, regarding
tolls on the Panama Canal, House Documents, Vol. 134,
62nd Cong., 3d Sess., 1912-13, Doc. 1313.

Great Britain and the Panama Canal, G. C. Butte, 63d

Cong., 1st Sess. (1913), Senate Documents, Vol. 20, Doc.
19.

366 CARIBBEAN INTERESTS

Whiteley, J. G., Panama Canal Tolls, Chandler P. Anderson,
63d Cong., 1st Sess. (1913), Senate Documents, Vol. 20,
Doc. 32.

Rule of Treaty Construction, Hannis Taylor, 63d Cong.,

1st Sess. (1913), Senate Documents, Vol. 20, Doc. 31.

Diplomatic History of the Panama Canal, 63rd Cong.,

2d Sess. (1913-14), Senate Documents, Vol. 15, Doc. 474.

Porto Rico
Books

Rowe, L. S., The United States and Porto Rico, New York,

1904.
Verril, A. H., Porto Rico, Past and Present, and San Domingo
of Today, New York, 1914.

Periodicals and Pamphlets

Allen-, C. H., How Civil Government Was Established in

Porto Rico, No. Amer. Rev., 174, pp. 159-174 (1902).
Falkner, R. P., Citizenship for the Porto Ricans, Amer. Pol.

Sci. Rev., 4, pp. 180-196 (1910).
Foraker, J. B., The United States and Porto Rico, No. Amer.

Rev., 170, pp. 464-471 (1900).
Hollander, J. H., The Finances of Porto Rico, Pol. Sci.

Quart, 16, pp. 553-581 (1901).
Rowe, L. S., The Supreme Court and the Insular Cases, Ann.

Amer. Acad, of Pol. & Soc. Sc, 18, pp. 226-250 (1901).
Rutter, F. R., Porto Rican Sugar, Quart. Jour. Econ., 17,

pp. 65-71 (1902).
Smith, G. H., Porto Ricans and the Constitution, Arena, 23,

pp. 626-634 (1900).
Willoughby, W. F., Reorganization of Municipal Government

in Porto Rico, Pol. Sci. Quart., 24, pp. 409-443 (1909).

Venezuela

Books

Bates, Jr., Lindon, The Path of the Conquistadores, London,

1912.
Dalton, L. V., Venezuela, New York, 1912.

RECENT CARIBBEAN DISCUSSIONS 367

Periodicals, Pamphlets and Documents

Bowen, H. W., Castro and American Diplomacy, No. Amer.
Rev., 184, pp. 577-580 (1907).

Dennis, W. C, The Orinoco Steamship Company Case before
the Hague Tribunal, Amer. Jour, of Int. Law, 5, pp.
35-64 (1911).

Lammasch, H., Address ... on Opening the Arbitration be-
tween the United States and Venezuela in the Matter of
the Orinoco Steamship Company's Claim, September 28,
1910, Amer. Jour, of Int. Law, 5, pp. 32-34 (1910). Ad-
dress ... on Closing the Arbitration between the United
States and Venezuela in the Matter of the Orinoco Steam-
ship Company's Claim, October £5, 1910, Amer. Jour, of
Int. Law, 5, p. 65 (1911).

The Venezuela Cases, Amer. Jour, of Int. Law, 3, pp.

985-990 (1909).

Award of the Permanent Court of Arbitration at The

Hague in the Orinoco Steamship Company Case between
the United States and Venezuela, Amer. Jour, of Int.
Law, 5, pp. 230-235 (1911).

Venezuela, General Descriptive Data prepared in Au-
gust, 1913, Pan-American Union, Washington, 1913.

West Indies in General
Books

Aspinall, A. E., The British West Indies, Boston, 1912.
Gardner, W. J., A History of Jamaica, New York, 1909.
Harding, C. H., The Buccaneers in the West Indies in the

XVII Century, New York, 1910.
Henderson, John, Jamaica, London, 1906.
Hill, R. T., Cuba and Porto Rico with the Other Islands of

the West Indies, New York, 1898.
Lamont, Norman, Problems of the Antilles, Glasgow, 1912.
Livingston, W. P., Black Jamaica, London, 1899-
Masefield, John, On the Spanish Main, New York, 1906.
Meikle, L. S., Confederation of the British West Indies versus
Annexation to the United States, London, 1912.

368 CARIBBEAN INTERESTS

Ober, F. A., Our West Indian Neighbors, New York, 1904
Guide to the West Indies and Bermudas, New York, 1908.

Shattuck, G. B. (ed.), The Bahama Islands, New York, 1905.

Stoddard, C. A., Cruising among the Caribbees, New York,
1895.

Verrill, A. H., Porto Rico, Past and Present, and San Do-
mingo of Today, New York, 1914.

Walker, H. de R., The West Indies and the Empire, Lon-
don, 1901.

Periodicals and Documents

Adderley, Augustus, West Indian Grievances, Fortnightly, 75,

pp. 354-358 (1901).
Austin, H., In the Wake of the Buccaneers, New Eng. Mag.,

n.s., 45, pp. 172-183 (19H).
Judson, W. V., Strategic Value of Her West Indian Posses-
sions to the United States, Ann. Amer. Acad, of Pol. and

Soc. Sc, 19, pp. 383-391 (1902).
Lamont, N., West Indian Recovery, Con temp., 101, pp. 232-

241 (1912).
Nevin, J. J., How the Trade of the West Indies Might Be

Developed, Westminster, 156, pp. 441—445 (1901).
Penfield, F. C, Practical Phases of Caribbean Dominion, No.

Amer. Rev., 178, pp. 75-85 (1904).
Rowe, L. S., Extension of American Influence in the West

Indies, No. Amer. Rev., 175, pp. 254-262 (1902).
• ' Canada-West Indies Conference, Department of Trade

and Commerce, Ottawa, 1913.

INDEX

ABC Powers, 3-4, 346

relation of, to United States, 346-
348
Africa, partition of, 2
Amador, Manuel, 200, 201
American foreign policy in Carib-
bean, 336-351
See also Monroe Doctrine ; Protec-
torates
American foreign trade, 27, 28, 47,
48, 51, 52, 57, 87, 88, 156, 241,
251, 338, 343, 344
See also Foreign trade
American investments abroad, 28,
323
growth of, 23, 28
in Caribbean, 30, 32
in Central America, 30
in Colombia, 31
in Cuba, 89, 90, 94, 264, 265
in Dominican Republic, 110
in Panama, 31

See also Capital; Foreign Invest-
ments; Investments
American naval interests in Carib-
bean, 315, 316, 319-320, 321,
322
American Navy in the Caribbean,
315, 316, 319, 322
and Panama, 196, 217, 222, 223
American leadership in Caribbean,

349, 350
Arrowroot, 51
Asia, partition of, 2
Asphalt, 255

control of, in Caribbean, 296
Trinidad, 44
Atrato River Canal route, 232

Bahamas, American trade in, 57

population of, 55, 56

products of, 56

prosperity of, 55, 56

sponges of, 56

turtle shell of, 56
Baker, L. D., pioneer in fruit trade,
277

Bananas, American trade in, 39

consumption of, in the United
States, 278

Costa Rica, 156, 157

development of trade in, 278, 279

food value of, 279

Honduras, 171, 172

imported, by Europe, 279
by United States, 276-281

Jamaica, 38, 39

Nicaragua, 185

See also Fruit trade
Banking connections, West Indian,

25
Barbados, 47
Barbados sugar, 47, 49
Balfour, A. J., on Caribbean fortifi-
cations, 315
Bermuda, 58

foreign trade with, 59, 60

products of, 59

tourist travel in, 60
Bertrand, Francisco, 166
Big Brother Policy, 336-351

See also Protectorates, Caribbean,
American interests in; De-
pendence of Caribbean
Big business in Caribbean, 294, 326
Blanco, G., 243
Bonilla, Manuel, 166
Brazil, coffee, 266
Brazilian valorization scheme, 257
British Caribbean Colonies, fortifi-
cation in, 314-316
British Colonies. See Great Britain
British Guiana, decline of, 62

foreign trade with, 62, 63

population of, 62

products of, 63

sugar of, 63
British Honduras, foreign trade
with, 61

population of, 60, 61
British Navy, oil supply of, 293
British West Indies, 33-67

American trade with, 20

economic position of, 64, 67

369

370

INDEX

Bryan, W. J., and the Colombian

Treaty, 236
Buchanan, William I., 169
Bunau-Varilla, P., 201, 204

Cabrera, Estrada, 161
Cacao, 253, 255, 257, 269, 270
expansion of trade in, 270, 273
Grenada, 50
imports of, in United States, 271,

272
manufacture of, 43
production of, Caribbean, 302, 303
tariffs on, 45
Trinidad, 43
West Indian, 45
where consumed, 270, 271
where grown, 270
Caceres, Raymond, 119
Caperton, William B., 138, 140
Capital, and native populations, 306
British, 240

in Caribbean, 28, 295-306, 333, 334
character of exploitation by, in

Caribbean, 296, 297, 298
influence of, on Caribbean politics,
325, 326
on politics in North and South
America, 325, 326
invested, in fruit trade, 280

in sugar mills, 300-301
See also American investments;
Foreign investments; Invest-
ments
Capitalistic development of agricul-
ture in Caribbean, 305
Caribbean, 52

big business in, 294, 326
cacao production, 302, 303
coffee, 256, 266
commercial importance of, 15
concessions in, 322, 335
control of asphalt in, 296
copra production in, 302
degree of development of, 27
dependence of, II, 143, 252, 253,
327
on foreign capital, 302, 303
on foreign markets, 250-258
on United States, 255, 260
development of, character of, 294-
295
handicaps in, 303, 304
industrial, 35
exploitation of population of, 306
foreign investments in, 302, 303,

331-334
fruit trade in, 298

Caribbean, fruit trade in, control of,
296, 297
harbor improvements in, 309-313
ignorance of, 15
international position of, 8
labor, 295

character of, 305
leadership in, 336-351
markets for products of, 255
oil of, 286, 287
oil supply of, attitude of United

States toward, 292
political interests in, 20
population of, 258, 259, 305
ports of, effect of canal on, 308
ports of call of, 309-312
products of, 11, 260, 275
republics of, independence of, 339-

351
small investments in, 302, 303
tariffs in, 25

trade with United States, 274, 338
United States' interest in, 15, 19,
24, 144, 145, 273, 275, 336
commercial, 338
United States' position in, 32, 336
Caribbean colonies, British, 33-67,
307, 312, 313
fortification of, 314-316
Danish, 76, 77, 78, 79, 311
Dutch Antilles, 309
European, 308
French, 68, 72, 310
Caribbean commerce, 9, 10, 25, 343,
344
American share in, 26, 64, 65, 66,

67, 338, 339
amount of, 10, 24, 26
character of, 9
division of, 24
increase of, 24, 25, 26
Castro, C, Venezuelan dictator, 244-

248
Central America, British rights in,
218
Court of Justice in, 185, 186
foreign investments in, 30
irresponsible governments in, 152
lack of political unity in, 149
Monroe Doctrine and, 348
oil in, 288
population of, 150
public debt of, 152, 153
railroads in, 153, 154, 299, 300
revolutions in, 149, 151
United States' interest in, 148, 149
policy toward, 187, 192
China, concessions in, 2

INDEX

371

Claims. See Capital; Concessions;

Foreign investments; Foreign

trade; Investments; Public

debts
Clayton-Bulwer Treaty, 206, 307,

208, 218, 219
criticism of, 219
Cleveland, Grover, and Venezuela,

243, 244
Coconuts, Trinidad, 43
Coffee, 253,
Brazilian, 266

Brazilian valorization scheme re-
garding, 257
Caribbean, 256, 266
Colombian, 240

countries of production of, 265
Cuban, 93
culture of, 269
Guatemalan, 164
Haitian, 146, 267
imported into the United States,

266
Nicaraguan, 185
Porto Rican, 100
Venezuelan, 250
Colombia, American attitude toward,

236, 237
American investments in, 31
area of, 239
coercion of, 239
coffee of, 240
disregards Panamanian interests,

198-199
early settlements in, 229
expressions of regret of, 234-236
finances of, 240, 241
foreign trade with, 240
fruit trade with, 31, 240
Hay-Herran treaty and, 197
industries in, 240
investments in, 31, 240
negotiations of, for Panama

Canal, 196, 197, 199
with Taft Administration, 232
with Wilson Administration,

232, 233
oil of, 289, 293
public opinion concerning Panama

in, 234, 235
relations of the United States

with, 230-242
relations of Panama with, 193
sends troops to Panama, 202, 203
treaties with, in Roosevelt and

Taft Administrations, 232
treaty of, with United States, 231
See also Panama; Panama Canal

Colonies in Hie West Indies, 25
bee also Caribbean, Denmark, Eu-
ropean, Frnnce, Great Bri-
tain, Netherlands, and United
States
Colored and white population in

America, 341, 342
Colton, G. R., 121
Commerce, American, in Caribbean,
26, 64, 65, 66, 67, 338, 339
Caribbean, 9, 10, 25, 343, 344
amount of, 10, 24, 26
character of, 9
control of, 1
division of, 24
increase of, 24, 25, 26
increase of international inter-
est in, 14
See also Foreign commerce; For-
eign trade
Conant, C. A., 182
Concessions in Caribbean, 322-335
in Mexico, 327, 328, 331-333
oil, 333, 334

political character of, 328
relations of, to local government
in Caribbean, 327
Copra production, Caribbean, 302
Costa Rica, American interest in,
156
foreign trade with, 156, 157
government of, 154, 155
population of, 154
public debt of, 155
standard of life, 157
Court of Justice, Central America,

185, 186
Cuba, coffee of, 93

commercial importance of, 20

finances of, 324

foreign investments in, 28, 29, 89,

90, 94, 264
foreign trade with, 94, 95, 96

American, 95, 96
fruit trade with, 92, 93
industries of, 89
international relations of, 21
Monroe Doctrine and, 325
politics in, 82, 83
population of, 80, 81, 86
relations of, to United States, 80,

81, 82, 337
self-government in, 83
sugar of, 89, 91, 93, 94, 263, 300

importance of, 262
tariff relations of, 86
tobacco of, 91, 92
trade development of, 87, 88

372

INDEX

Cuba, trade relations of, 85, 86
treaty of peace, 81

with United States, 90
Curacao, 74, 75

Danish West Indies. See Denmark,

West Indies
Denmark, Caribbean colonies of,

311
Denmark, West Indies, 76, 77
harbor improvements in, 312
St. Thomas, 77
trade of, 78, 79
Dependence, of Caribbean, 11, 143,
252, 253, 327
for imports, 258
on foreign capital, 302, 303
on United States, 255, 260
of West Indies, tariffs, 45
on the United States, of British
Colonies, 63, 64
of Cuba, 93
of Porto Rico, 100
Disease. See Sanitation
Dollar diplomacy. See American
investments; Capital; Carib-
bean ; Foreign investments ;
Public debts
Dominica, 53

fruit trade with, 53
Dominican Republic, 5

American interest in, 122, 123
customs collection in, 118
European intervention in, 111
foreign investments in, 29, 30, 109,

110, 113, 114
foreign trade with, 116, 117, 123,

124
government of, 108, 109, 117, 119,

120
history of, 107, 108
importance of, 106
lessons of relations with, 122,

123
population of, 107, 120, 121
protectorate, 120, 121
protocol of 1905, 114, 115, 116
public debt of, 109, 111, 114,

117
sanitation in, 113
spoils system in, 122
sugar of, 30, 112, 301
treaty of 1907, 117
United States appointments in,

121, 122
United States interest in, 108
Dutch West Indies. See Netherlands
West Indies

East Indians, 258, 259
in British Guiana, 62
in Trinidad, 42
Economic exploitation in Caribbean.
See Big business; Capital;
Foreign investments; Foreign
trade ; Investments ; Public
debts
Economic position, Caribbean, 255
European colonies, effect of Pana-
ma Canal upon, 308
of Great Britain, Caribbean, 312-
313
Exports, Caribbean, 254

United States, character of, 18

Far Eastern trade, Panama Canal

and, 9
Finances, Colombian, 240, 241
Cuban, 324
Guatemalan, 162, 163
Honduran, 167-171
Jamaican, 36
Nicaraguan, 181

in weak Caribbean countries, 253
Financial interests. See Commerce;
Foreign commerce ; Foreign
trade; and Public debts
Fonseca Bay, 321
Food supply, Caribbean, 250, 259
Foreign commerce
American interest in, British Isl-
ands, 45
Caribbean, 9, 10, 25, 343, 344
amount of, 10, 24, 26
increase of, 24, 26
increase of American, 64, 65, 66,

67
control of, by home country, 25
Panama Canal and, 307, 308
See aho Commerce; Foreign
trade; Trade
Foreign debts. See Public debts
Foreign investments, 6, 7, 11, 264
Caribbean, 11, 28, 295-306, 325-335
in Caribbean, 28, 195, 302, 303, 306,
323-335
activities of, 297
Central American, 30
character of, in America, 326
Colombian, 31, 240
Cuban, 28, 29, 89, 90, 94, 264
Dominican Republic, 29, 30, 109,

110, 113, 114
in fruit trade, 280
government support of, 12
growth of American, 23, 28
Haitian, 133

INDEX

373

Foreign investments, lack of, in

tropics, 23
in Mexico, 327, 328
in oil, 333, 334
Porto Rican, 29, 30
and rights of native populations,

306
Venezuelan, 31, 246, 247-250
See also American investments;

Capital; Investments
Foreign trade, 7, 276-281
American, 343, 344
Bahamas, 55, 57
Barbados, 47, 48
Bermuda, 59, 60
British Guiana, 62, 63
British Honduras, 61
Caribbean, 9, 10, 25, 254, 343,

344
share of United States in, 27,

38
Colombia, 240
Costa Rica, 156, 157
Cuba, 94, 95, 96
dependence of, on few products

in Caribbean, 254
development of, 85, 86, 87, 88
Dominica, 53
Dominican Republic, 116, 117, 123,

124
effect of Panama Canal on, 308
French West Indies, 70
growth of interest in, 18
Guatemala, 163, 164, 165
Haiti, 146, 147
Honduras, 171, 172, 173
importance of, in Caribbean, 253
Jamaica, 40
Leeward Islands, 54
Nicaragua, 184
Porto Rico, 100, 104
Salvador, 159, 160
Trinidad, 44
United States, 241

in Caribbean, 274, 338
Venezuela, 250, 251
Windward Islands, 51, 52
See also Commerce; Foreign com-
merce; Trade
Fortifications in Caribbean colonies,

314-31 (i
Panama, 220, 224

arguments for and against, 223,

224, 225
installed, 227

opinion of D. J. Foster on, 232
opinion of James A. Tawney on,

222

Foster, D. J., on fortifications of

Panama, 222
France, C. B., fruit trade pioneer,

277
France, West Indies, 68, 72, 310

economic conditions in, 69, 71

foreign trade with, 70

harbor improvements in, 310

population of, 68, 72
Freight rates, Bermudan, 60

West Indian, 41

Windward Islands, 52

French Guiana, 71
French West Indies. See France,

West Indies
Fruit trade, 153, 255, 256, 299

American, 280, 281
interest in, 30
capital in, 280

Caribbean, 298

control of, 296-297

Colombian, 31, 240

Costa Rican, 156, 158

Cuban, 92, 93

of Dominica, 53

Honduran, 171, 172

investments in, 280

Jamaican, 38, 39

Panamanian, 31

pioneer in, 277

political influence of, 280

Porto Rican, 102

Trinidad, 42

Germany's criticism of Monroe Doc-
trine, 334
Goethals, Colonel George W., 221
Gomez, J. V., in Venezuela, 247, 248
Great Britain, Caribbean colonies
of, 34
Caribbean industrial development

and, 35
Central America and, 218
controversy of, with Venezuela,

5
harbor improvements of, 312, 313
naval bases of, in Caribbean, 314-

318
position of, in Caribbean, 307
See also British West Indies and
names of individual colonies
Great Corn and Little Corn Islands,

321
Grenada, 49, 50

cacao of, 50
Grenadines, 49, 50
Grey, Sir Edward, 222

on Panama tolls, 210, 211

374

INDEX

Guantanamo, 319
Guatemala, coffee of, 164

finances of, 162, 163

foreign trade with, 163, 164, 165

German influence in, 164

government of, 162, 163

international relations of, 161

population of, 161

relations of, with Salvador, 159

Hague Court and Preferential

Treatment, 244-247
Haiti, 6

American operations in, during
1914-1915, 138, 139, 140

attitude of other powers toward,
129, 130

character of people of, 133
of rulers of, 134, 135, 136

coffee of, 146, 26T

difficulty of imperialism in, 127

European intervention in, 138

foreign investments in, 133

foreign trade with, 146, 147

government of, 129

history of, 131, 132

in 1914, 137, 138, 139

natural resources of, 145, 146

population of, 127, 146

products of, 146

protectorate established in, 142,
143

recent political conditions in, 137,
138

revolutions of 1914, 138, 140

slavery in, 129, 130

sugar of, 133, 134
Haitian presidents, 132
Ham, C. D., 181, 183
Harbor improvements, British, in
Caribbean, 312, 313

Caribbean, 309-312

Danish, in Caribbean, 312

French, in Caribbean, 310

Netherlands, in Caribbean, 309
Harrison, F. C, 182
Hawaii and Panama, 223
Hay-Herran Treaty, 197
Hay, John, 2, 204
Hay-Pauncefote Treaty, 207, 208,

211, 219, 221
Health. See Sanitation
Health problems, 12
Heureaux, Ulises, 108
Hollander, J. H., 121
Honduras, American interest in,
30

foreign trade with, 171, 172, 173

Honduras, fruit trade with, 171, 172
government of, 166
population of, 165, 171, 172
proposed American protectorate

in, 170
public debt of, 167, 171
railroads of, 166

relations of, with Nicaragua, 166
United States and, 170

Imperialism, 1, 7, 16, 19, 339
in Asia and Africa, 2
in Haiti, 125, 142, 143
Monroe Doctrine and, 2
recognition of inequality of states,

347-348
United States and, 6, 21, 22, 23,
125, 126, 143, 144, 151, 187,
336-351
Import trade, Caribbean, 258
Industries, Caribbean, importance
of United States in, 274,
275
Industry, connection of, with for-
eign trade, 18
See also names of individual coun-
tries
International affairs, increase of

importance of, 17
International trade, growth of, 1
Intervention, in Caribbean, 111, 339,
350
in Haiti, 138, 139, 140
in Nicaragua, 177
of United States, 21
in Caribbean, 339-341
Investments, foreign, 4, 11
United States, 11
See also American investments;
Capital; Foreign invest-
ments
Jamaica, bananas of, 38, 39
economic decline of, 36
finances of, 36
foreign trade with, 40
former importance of, 35
fruit trade with, 38, 39
labor conditions in, 36
land holding in, 37
population of, 36
rum of, 37
sugar of, 37, 38
tobacco of, 39
Japan and Magdalena Bay incident,

331-333
Jaurett, expelled from Venezuela,

247
Jennings, F. B., 170

INDEX

375

Keith, Minor, C, 155
Key West, 319
Knox, P. C, 170, 222

and Magdalena Bay incident, 331-
333

on Panama tolls, 210, 211

Labor conditions, in Barbados, 47

in Jamaica, 36
Land holding in Jamaica, 37
Latin America, attitude of United

States toward, 329, 330
Leeward Islands, 52

foreign trade with, 54

history of, 54

limes of, 54, 55

population of, 52
Limes, of Dominica, 53

of Leeward Islands, 54, 55
Loans, foreign, 4

See also Public debts
Lodge Resolution, 294
L'Ouverture, Toussaint, 131

Magdalena Bay, 294, 331-333
Manufactures, increase of exports

of, 18
Mexico, concessions in, 327, 328, 331-
333

development of oil supplies in,
286, 287

foreign investments in, 327-328

oil regions in, 285, 286

See also Oil
Mixed Claims Commission, 247

and awards, Venezuela, 246
Molasses. See Sugar
Mole St. Nicholas, 142, 320
Monroe Doctrine, 2, 4, 111, 112, 113,
114, 129, 218, 244, 291, 294,
323-335, 328, 339, 346

Caribbean and, 350

Central America and, 348

concessions and, 322-335

economic phases of, 3, 323, 33i

oil concessions and, 290

Pan-Americanism and, 348, 349

proposed modification of, 345

South America and, 350

United States in Caribbean and,
348

weak American states and, 5
Morgan, J. P., 169
Morales, Carlos, F., Ill, 119
Mosquito Territory, 218
Muscovado sugar, 261

Nassau, in American history, 55
National resources, development of,

17
Naval bases, British, in Caribbean,
314-318
Caribbean, 309, 310
Cuba, 84, 85

See also Colon ; Denmark "West In-
dies; Fonseca Bay; Great
Corn and Little Corn Islands;
Guantanamo; Key West; Mole
St. Nicholas; Panama; Sa-
mana Bay
Naval interests, control of oil de-
posits and, 282-294
United States, in the Caribbean,
315, 316, 319, 322
Navy, oil and the, 283, 284, 286, 293
Negroes, importance of, in Carib-
bean, 34, 35
See also Population
Netherlands, West Indies, 72
harbor improvements in, 309
history of, 72, 73
products of, 74, 75
sugar of, 74
Neutrality of Panama, 219
Nicaragua, 218
bananas of, 185
coffee of, 185

commercial facilities of, 174, 175
diplomacy of Wilson administra-
tion as to, 179, 180
finances of, 181
foreign trade with, 184
government of, 175, 176
intervention in, 177
political relations of, with United

States, 183
population of, 173
protectorate proposed in, 176, 180

opinions concerning, 176, 177
public debt of, 177, 178, 181, 182
relations of, with Honduras, 166
revolution in, in 1912, 22
subdued by American troops,
177
treaty with United States, 180

Oil, as fuel, 282, 283
Caribbean, 286, 287
Central American, 288
Colombian, 289, 293
foreign investments in, 333, 3S4
in North and South America, 288,

289
Panama Canal and, 334
political importance of, 282, 290

376

INDEX

Oil, Trinidad, 289

used by American Navy, 283, 284
used by British Admiralty, 283,

284
Venezuelan, 289
Oil concessions and the Monroe Doc-
trine, 290
Oil supplies, naval bases and, 291,
292
undeveloped, 286, 287
Oil supply, of British Navy, 293
control of, 285, 290, 291
Mexican development of, 286, 287
Open Door Policy, 2
Order, 7

an international question, 15
in Cuba, 81, 82, 83, 84
importance of, 4, 12, 14
in Caribbean, 15
in international affairs, 12
Orinoco, concessions in, 247
Orinoco Steamship Company and
Hague Court, 249

Panama, American naval policv

and, 196, 217, 222, 223
Anglo-American relations and,

207
Colombia and, 193, 198, 199
commerce and, 205, 206
commercial routes through, 194
effect of failure of canal projects,

198
French Company at, 197, 198
fruit trade with, 31
Hawaii and, 223
history of, 193
importance in world affairs, 194

of canal for, 196
interest of United States in, 195,

217
neutrality of, 220
politics in, 204, 205
recognition of, 203, 204
revolution in, 200, 201, 203

and American foreign policy,

337
and American Navy, 201, 202
treaty with, 204, 206
Panama Canal, 8

American contention concerning,

212, 213
American foreign policy and, 338
commercial importance of, 9
effect of, on British commerce,

307
European colonies and, 308
Far Eastern trade and, 9

Panama Canal, fortification of, 217-
228
importance of, to Colombia, 231
naval interests involved in, 319-

322
negotiations for, 196, 197, 199
oil resources and, 334
responsibility of United States in,

338
treaty concerning, 207-209
Panama fortifications, 220, 221
arguments in favor of, 224, 225
installed, 227

opinion of War Department con-
cerning, 226
Panama tolls, 206-216
act repealed, 214-215
attitude of Taft administration,
214
of Wilson administration, 214
British protest against, 210, 213
dispute over, 209
equal treatment, 212
neutralization, 208, 212

Knox, P. C, and, 210-221
partv declarations concerning, 209,
210
Pan-American alliance, difficulties

of, 346-348
Pan-American cooperation, 345, 346,

349
Pan-Americanism, 3

real basis of, 347-351
Pearson and Son, 287, 291, 292, 293,

333
Petroleum, Trinidad, 44

See also Oil
Piatt amendment, 21, 81, 84, 94, 105,

120, 324, 336
Political interests, expanding, 22
Population, American, 341, 342
of Bahamas, 55, 56
of Barbados, 47
of Bermuda, 59
of British Honduras, 60, 61
of Caribbean, 258, 259, 305

weakness of, 306
of Central America, 150
of Colombia, 229, 230, 239
of Costa Rica, 154, 157
of Cuba, 85, 87
of Dominica, 53
of Dominican Republic, 107, 120,

121
of Guatemala, 161
of Haiti, 127, 128, 146
of Honduras, 165, 171, 172
of Jamaica, 36

INDEX

377

Population of Latin America, 312

of Leeward Islands, 52, 54

of Nicaragua, 173, 174

of protectorates, 127, 128

of Porto Rico, 98, 99

of Salvador, 158

of Trinidad, 42

of Turks Islands, 57

of Venezuela, 229, 250

of Windward Islands, 49, 50
Porto Rico, American influence in,
103

coffee of, 100

foreign investment in, 29, 30

foreign trade with, 100-104

fruit trade with, 102

industries of, 100

population of, 98, 99

sugar of, 100

tariffs, 103, 104

tobacco of, 101
Ports, Caribbean, effect of Canal
on, 308

Nassau, 55

Panama, 220
Ports of call, Caribbean, 309-312
Potatoes, Bermudan, 59
Products, of Caribbean, 11, 260-
275

See also names of individual coun-
tries and names of commodi-
ties, Asphalt, Bananas, Cacao,
Cocoanuts, Coffee, Copra,
Fruit Trade, Potatoes, Rice,
Sugar and Tobacco
Property, protection of, 4, 14
Protectorates, 22, 23, 187-192, 306,
337, 339

arguments for and against, 111,
112

Caribbean, 336, 337

character of, 105

Cuba, 81

Dominican Republic, 114, 115, 116,
120, 121

Haiti, 138, 142, 143

Honduras and proposed, 170

Nicaragua, 176, 180

population of, 127, 128

United States and, 21
Public debts, 20, 323-335

Caribbean, 329, 331-333

Central American, 152, 153

Costa Rican, 155

Cuban, 84

of Dominican Republic, 109, 111,
114, 117

excessive, 326

Public debts, forcible collection of,
244-249, 325

Guatemalan, 162, 163

Hague Conference rules on col-
lection of, 325-326

Honduran, 167, 171

Nicaraguan, 177, 178, 181, 182

of Salvador, 159

Venezuelan, 245, 325
Public order, 7
Pulliam, W. E., 122

Railroads, Central American, 153,
154, 166, 299, 300
Colombian, 240
Venezuelan, 245
Revolutions, South American, 230
Reyes, General R., attempts to settle

Panama controversy, 231
Rice, of British Guiana, 62
Caribbean, 258
Costa Rican, 156
Trinidad, 43
Roosevelt, Theodore, attempts to
settle Panama controversy,
231-232
on fortification of Panama, 221
Panama Canal and, 199-201
on Panama revolution, 238
Root-Cortes-Arosemena Treaty, 232
Root, Elihu, 170
Roumania, control of oil supply by,

285
Rum, Jamaican, 37
Russia, control of oil supply by, 285

Salt, Turks Islands, 57, 58
Salvador, foreign trade with, 159-
160
population of, 158
public debt of, 159
relations of, with Guatemala, 159
Samana Bay, 320

San Domingo. See Dominican Re-
public
Sanitation, in Central America, 13
in Cuba, Porto Rico and the

Canal Zone, 13
in Dominican Republic, 113
international importance of, 12, 13
in West Indies, 13
Santo Domingo Improvement Com-
pany, 110
Sea power, American position in
Caribbean and, 315, 316, 319,
322
British, in Caribbean, 314-318
oil supply and, 282-294

378

INDEX

Sea power, Panama Canal and, 319-

322
Sisal, Bahamas, 56, 57
South America, stability of, 3
Southerland, Admiral Win, H. H.,

177
Spanish colonies, American interest

in, 20
Spanish- American War, effect of, on
American naval interests, 217
on the United States, 19
necessity of Isthmian Canal after,
219
Spoils system in Dominican Customs

Service, 122
Sponges, Bahaman, 56
St. Lucia, 49, 50
St. Thomas, 321

See also Denmark, West Indies
St. Vincent, 49, 50
arrowroot of, 51
Stimson, H. L., on fortifications of

Panama, 228
Sugar, 253, 255
of Barbados, 47, 49
of British Guiana, 63
of British India, 263
Caribbean, 260
consumption of, in United States5

274
countries raising cane, 262
Cuban, 89, 91, 93, 94, 262, 300
of Dominican Republic, 30, 112,

301
effect of tariff on, 256
of French West Indies, 69, 71
Haitian, 133, 134
importance of Caribbean in pro-
duction of, 262
increasing economic importance of,

261
Jamaican, 37, 38
of Leeward Islands, 54
methods of manufacturing, 261,

300
of Netherlands West Indies, 74
Porto Rican, 100
tariff on, 26
Trinidad, 43
United States, 263
Sugar cane, Grenada, 50

Taft, W. H., attempts to settle Co-
lombian controversy, 232

on fortification of Panama, 221
Tampico-Tuxpan oil region, 287, 288
Tariffs, 25, 253, 256

Canadian preferential, 45

Tariffs, Caribbean, 25

Cuban, 86

effect of, on Caribbean, 255
on coffee trade, 266

French West Indies and, 69

Porto Rican, 103-104

Trinidad, 43

West Indian, 43, 45

Windward Islands, 50
Tawney, James A., on Fortification

of Panama, 222
Tobacco, 255

Cuban, 91, 92

Jamaican, 39

Porto Rican, 101
Tourist travel, Bermuda, 60
Trade. See Commerce; Foreign
commerce ; and Foreign
trade
Trade competition, 6
Trade control in Panama Canal, 8
Trade routes, 16
Trinidad, asphalt of, 44

cacao of, 43

cocoanuts of, 43

commercial development of, 41

commercial importance of, 44

foreign trade with, 44, 45

fruit trade with, 42

oil of, 289

petroleum of, 44

population of, 42

products of, 43, 44
Tropics, commerce of, 23

mastery of, 16

northern South America, 230, 231
Turks Islands, 57

dependence of, 58

population of, 57

salt of, 57, 58

Ugarte, Angel, 169
United States, attitude of, toward
development of oil supply in
Caribbean, 292
cacao imports of, 271, 272
coffee imports of, 266, 267, 268
colonies and, 19, 126
consumption of sugar in, 274
control of oil supply by, 285, 291
dominance of, in Caribbean, 351

in West Indies, 64, 65, 66, 67
foreign trade of, 18, 240
historical connection of, with

Panama, 195
interests of, in Caribbean, 273,
275
in Central America, 148, 149

INDEX

379

United States, interests of, in Do-
minican Republic, 108, 117,
122, 123
in Panama, 195, 199
investments of, 11
naval interests of, in Caribbean,

315, 316, 319, 322
political interests of, 22
relations of, with Central America,
187, 192
with Colombia, 230-242
with Cuba, 81, 82, 337
with Haiti, 138, 139, 140
with Honduras, 30, 170
with Nicaragua, 176, 180, 183
with Porto Rico, 104
with Trinidad, 44, 45

Venezuela, 5

American investments in, 31
boundary dispute with Great Brit-
ain, 244
coffee of, 250

concessions by, in Orinoco, 247
conflict with Netherlands, 248
controversy with European pow-
ers, during 1902-1903, 246
early settlements in, 229
foreign debt claims, 246

Venezuela, foreign investments in,

31, 246, 247, 250
foreign trade with, 250
government of, under Blanco,

243
under Castro, 244-248
under Gomez, 247, 248
history of, 242, 243
Mixed Claims Commission and

awards, 246
oil of, 289

population of, 229, 250
public debts of, 245, 325
recent dispute with United States,

247-250
trade with United States, 251

Waters Pierce Oil Company, 287
Wilson, Woodrow, on relations with

Latin America, 329, 330
Windward Islands, 49

freight rates to, 52

population of, 49, 50
Wood, Leonard, 222, 225

on fortifications at Panama,
226
World politics, growth of, 17

Zelaya, Jose, 166

(1)

Date Due

_L

7P7?*>

L. B. CAT. MO 1137

- I

AUG 31

mm

CLAPP

-e,c?eJ0io02 00367 2032

Canbbean interests of the Umted States

F 2161 . J77 1916

Jones, Chester Lloyd
1881-1941.

Caribbean interests of the
United States.